| Symbol | Price | Change | %Change |
|---|---|---|---|
| I:DJI | $32,827.00 | 423.78 | 1.31 |
| SP500 | $3,806.80 | 36.25 | 0.96 |
| I:COMP | $10,564.52 | 89.27 | 0.85 |
U.S. stocks were higher early Tuesday morning
, but whipsawing overnight for the second straight day as the U.S. midterm elections had finally arrived.
The future for the S&P 500 lost 0.3% while that for the Dow Jones Industrial Average was 0.2% lower. On Monday, the benchmark S&P 500 rose 1% and the Dow industrials 1.3%. The Nasdaq composite added 0.9%.
The week is full of potentially market-moving events, including U.S. inflation data and the election, which could leave the U.S. government split between Democrats and Republicans. Every seat in the U.S. House of Representatives is up for election this year, along with about a third of the U.S. Senate.
On the line is control of both houses of Congress, currently under Democratic leadership. Voters are also electing governors in most of the states. They’ll be in office in 2024 when the next presidential election happens and could affect election laws or vote certifications. Many state legislative and local authorities also are on the ballot.
A divided government would likely bring gridlock rather than big, sweeping policy changes that could upset tax and spending plans.
Historically, when a Democratic White House has shared power with a split or Republican Congress, stocks have seen stronger gains than usual.
Analysts say a strong performance by Democrats in the elections could lead to increased spending to help the economy that might fuel inflation and leave the Federal Reserve obliged to continue to hike interest rates to get prices under control.
Higher rates put slow the economy by making it more expensive to buy a house, car or anything else on credit, though they take time to take effect. Rate hikes could bring a recession, and they tend to drag on prices for stocks and other investments.
With economists forecasting recessions for many economies as an inevitable side effect of the effort to quash inflation, sharp cutbacks in spending might hurt, rather than help, some analysts say.
Meanwhile, Asian stocks were mixed Tuesday with trading likely to stay bumpy in a week that brings new inflation data and other events that could shake markets. Germany’s DAX added 0.1% to 15,543.08, while the CAC40 in Paris slipped 0.4% to 6,390.14. In London, the FTSE 100 fell 0.4% to 7,274.37.
In Asia on Tuesday, Tokyo’s Nikkei 225 gained 1.3% to 27,872.11 on strong earnings reports. The Kospi in Seoul advanced 1.2% to 2,399.04 and Australia’s S&P/AXS 200 gained 0.4% to 6,958.90. Hong Kong’s Hang Seng sank 0.2% to 16,557.31, while the Shanghai Composite index shed 0.4% to 3,064.49. Thailand’s SET gained 0.5%. India’s markets were closed for a holiday.
Economists expect a U.S. government report on Thursday to show the consumer price index rose 8% in October from a year earlier, slightly lower than September’s 8.2% inflation rate.
A fourth straight month of moderating inflation from June’s peak of 9.1% could give the Federal Reserve leeway to loosen up a bit. The Fed has said it may soon dial back its rate hikes to half a percentage point, after it pushed through four straight mega increases of three-quarters of a point.
