World stock markets were mixed on Tuesday as investors prepared for a week filled with crucial events, including the U.S. presidential election and a Federal Reserve meeting. Uncertainty surrounding the election results, which may take days to finalize, added to market volatility. However, hopes for a rate cut from the Fed provided some relief. Major Asian indexes saw strong gains, driven by optimism that China would implement stimulus measures to support its slowing economy. China’s Shanghai Composite surged 2.3 percent, and Hong Kong’s Hang Seng climbed 2.1 percent on expectations of potential stimulus policies from Beijing.
European markets opened with modest losses, reflecting cautious sentiment, with the DAX in Germany slipping 0.1 percent and France’s CAC 40 edging down 0.2 percent. U.S. futures for the S&P 500 and Dow Jones Industrial Average showed muted optimism as investors awaited election results and the Fed’s rate decision. Oil prices rose on Tuesday, with U.S. crude reaching $71.74 per barrel and Brent crude at $75.31 after Saudi Arabia and other producers announced a delay in increasing output to stabilize prices amid global demand concerns. Currency markets saw the dollar strengthening to 152.36 yen and the euro gaining slightly to $1.0886. The Fed is expected to cut its key interest rate this week to support the U.S. economy amid fears of a potential downturn.
In the U.S., the S&P 500 fell 0.3 percent on Monday, while the Dow Jones and Nasdaq slipped amid recession risks. Despite the uncertainty, historical data shows that the U.S. stock market tends to rise in election years regardless of the party that wins. Brent prices have struggled this year due to doubts over demand from China, but recent gains offer hope for recovery in global energy markets. Investors are closely watching the Fed, anticipating another rate cut this week to address concerns about a potential economic slowdown. The market optimism stems from hopes that rate cuts will mitigate recession fears and support the economy.
Looking back at past election cycles, U.S. stocks rallied after Election Day in 2020, despite initial uncertainty over the final result. Analysts believe that a repeat Trump victory would be less surprising to markets than in 2016, when expectations of tax cuts and economic stimulus drove market optimism. As investors brace for an eventful week, the focus remains on how the U.S. election, Fed decisions, and potential Chinese stimulus measures will impact global markets. With major Asian indexes posting gains fueled by optimism and European markets showing cautious sentiment, investors are closely monitoring developments to navigate market volatility in the coming days.
