NEW YORK, Nov 3 (Reuters) - Global equity markets wobbled on Tuesday with investors eyeing the outcome of the US midterm elections, while oil prices continued their descent amid ongoing talks to end the Middle East conflict.
Most polls and nonpartisan analysts expect Democrats to wrest the House of Representatives from Republicans while control of the Senate remains uncertain. A sweep by Democrats could lead to tougher oversight of AI and more corporate regulation.
On Wall Street, the benchmark S&P 500 and the Nasdaq ended higher, led by gains in industrial, technology and communication services stocks, while consumer staples and materials shares drove losses. The Dow finished lower.
The Dow Jones Industrial Average fell 0.38%, the S&P 500 rose 0.36% and the Nasdaq Composite gained 0.83%.
The pan-European STOXX 600 index fell 0.58%. MSCI's gauge of stocks across the globe fell 0.06%.
"Over the past three weeks, there's basically been three primary events that the market has been factoring in and trying to see what the results would be: the first one was the Fed meeting last week; the second one was the earnings season; and today we're getting the third one, which is the midterm elections," said Wasif Latif, chief investment officer at Sarmaya Partners.
"The Fed meeting was pretty much a non-event," he said. "The earnings season has been good overall although it's been rough for some of the hyperscalers because high interest rate is beginning to have an impact on the market's appetite for more debt spending. As for the elections, we know the polls are predicting a strong showing for the Democrat side but the market might not yet be appreciating a potential pushback on data centers."
ISRAEL AID CUT
US President Donald Trump announced he had agreed to stop $4 billion in funding to Israel at the end of the year.
He said Israel no longer needed the funding and that some Democrats and left-wing politicians were using the US financial support to Israel as a talking point to criticize Republicans. He had made a deal with Israeli Prime Minister Benjamin Netanyahu to stop the aid, he said in an interview on Fox News.
The comments sent oil prices lower. Brent crude futures fell 1.12% to settle at $103.60 a barrel.
The US and Iran are still far from a deal to end their war, a senior Iranian official told Reuters on Tuesday. Overnight, the US carried out "defensive" strikes on Iran's Qeshm Island targeting surface-to-air missiles used against US assets, a US official said.
In currencies, the dollar edged higher against major peers including the Japanese yen and Swiss franc. It was up 0.48% at 158.70 against the yen and rose 0.28% to 0.8208 against the franc.
The euro was up 0.05% against the dollar at $1.1191.
The dollar index, which measures the currency against a basket of peers, was flat at 101.86. It hit a one-month low on Monday.
The Chinese yuan weakened against the US dollar after the People's Bank of China said it would raise the foreign exchange reserve ratio, a move aimed at putting the brakes on a long rally in the yuan. The yuan weakened 0.35% against the greenback to 6.67 per dollar.
In the bond market, the yield on government securities rose in the US and Europe. The yield on the US 10-year Treasury note rose 5.36 basis points to 4.948%.
The yield on the benchmark German 10-year Bund rose 1.39 basis points to 3.33%.
Cryptocurrencies stabilized after last week's Binance hack. Bitcoin was flat at $77,835.07.
In the commodity market, spot gold rose 0.05% to $3,930.04 an ounce.
(Reporting by Chibuike Oguh in New York; Editing by Nia Williams and Matthew Lewis)
