Global Markets Brace for U.S. Election Impact

Global stocks dipped as investors' hopes for significant U.S. interest rate cuts diminished ahead of U.S. elections. Positive earnings from major companies failed to boost markets. The Fed's policy moves are under scrutiny, while the U.S. election adds further uncertainty, impacting currencies and Treasury yields.

Global stocks declined on Tuesday, paralleled by bond yields and the dollar hovering near multi-month highs, due to investor caution over large U.S. interest rate cuts before upcoming U.S. elections. Positive quarterly earnings from companies like SAP and General Motors were noted, yet broader markets remained unimpressed.

U.S. stock futures hinted at another weak session following Monday's index declines, as the MSCI All-World index fell 0.3%. Peter Schaffrik of RBC Capital Markets highlighted the proximity to U.S. elections and ongoing strong economic data as key reasons for limiting further Federal Reserve rate cuts.

Amid election uncertainties, former Republican president Donald Trump and Democrat Vice President Kamala Harris vie closely in swing states, influencing the dollar's rise and keeping gold appealing. Meanwhile, 10-year Treasury yields hit late-July highs, and market speculation surrounds potential further rate cuts.

(With inputs from agencies.)