Futures listed on the S&P 500 and Nasdaq 100 indexes recovered from previous losses on Monday as U.S. stocks posted a second-day rally. This comes as investors turn their focus to Tuesday’s midterm elections.
While gold continued to trade lower, the U.S. dollar recovered following a two-day slump. Bull investors have led a rise in equity market investments as they expect the midterm elections to spur a near-term rally. According to election polls, the Republican party is largely expected to make gains, thereby placing a check on Democratic policies.
Ipek Ozkardeskaya, a senior analyst at Swissquote Bank, wrote in a note that while a Republican victory could slow debt, it may also slow growth. “The US debt burden could stop the Democrats from putting in place many economic reforms that they would’ve otherwise, if Republicans are sufficiently crowded to block them moving forward,” she explained.
Meanwhile, the United States’ inflation concerns continue to rise particularly after the core consumer price index rose more than forecast to a 40-year high in September. Across the ocean, the European Stoxx 600 experienced little change as trading began on Tuesday, while a Chinese equities rally was halted following the government’s defense of its Covid Zero policies.