Global Markets Brace as Elections Loom and Economic Uncertainty Lingers

Asian stocks dropped, bond yields reached multi-month highs, and gold traded near record levels as investors braced for the U.S. election. The market downturn was further affected by Japan's upcoming election, potential shifts in U.S. political power, and concerns over weak Chinese economic support.

Asian markets experienced a downturn on Tuesday as investors worldwide prepared for the impending U.S. election and economic uncertainty loomed. Benchmark 10-year Treasury yields reached their highest since late July, increasing by three basis points in Asia to 4.21%, amidst a broad trend of rising yields and a strong dollar.

In the U.S., stock futures edged 0.2% lower, while European futures rose slightly by 0.1%. Japanese markets also saw a decline as investors pulled cash ahead of the nation's general election this Sunday. Concerns about the ruling coalition's possible loss of majority weighed on stocks, bonds, and the yen, which fell to 151 per dollar for the first time since July.

Investors remain cautious globally, with MSCI's broadest index of Asia-Pacific shares outside Japan down by 0.7%. Markets in China were notably subdued, with traders awaiting stronger government measures to revive economic growth. Commodities, meanwhile, faced pressure due to lackluster demand and limited support from Chinese economic plans.

(With inputs from agencies.)