U.S. Stock Futures Drop, Dollar Ticks Higher: Markets Wrap

U.S. equity futures retreated and the dollar edged higher following areport that Russia and Iran have attempted to interfere in next month’s presidential election.

S&P 500 futures dropped after a volatile session Wednesday amid signs that a U.S. stimulus package is unlikely to become law before next month’s election. Australian shares also fell and Japanese equity futures dipped. House Speaker Nancy Pelosi continued talks with White House representatives even as the odds remained long for a deal that could pass in the Senate. The yield on 10-year Treasuries closed above 0.8% at the highest since June. The offshore yuan continued to strengthen.

Elsewhere, the pound jumped after European Union chief Brexit negotiator Michel Barnier said a deal is within reach.Copper traded near a two-year high on supply disruptions in Chile. Oil dropped to $40 a barrel in New York after anindustry report pointed to a surprise increase in American crude stockpiles.

Pelosi said she “has a prospect for an agreement” with the Treasury secretary, but it may not come together in time to pass before the Nov. 3 election. Mark Meadows said the White House is aiming for a compromise within the next 48 hours. Senate Republicans remain on a completely different track, and there aren’t enough votes in the chamber needed to pass a multi-trillion-dollar package, according to a Senate aide. Mitch McConnell “might not mind doing it after the election,” Pelosi said.

“We don’t see a stimulus package passed before the election,” Wells Fargo Securities LLC strategist Anna Han said on Bloomberg TV. “We still think the recovery will proceed and in three to six months you’re going to see that sequentially improving narrative and that’s going to help earnings growth going forward.”

Meantime, the U.S. escalated tensions with China by adding to the list of media outlets it describes as controlled by Beijing.

Here are some key events coming up:

  • The final presidential debate before the U.S. election, between President Donald Trump and former Vice President Joe Biden, will be live from Nashville, Tennessee on Thursday.
  • U.S. jobless claims come Thursday.

These are some of the main market moves:

Stocks

  • S&P 500 futures fell 0.6% as of 7:45 a.m. in Tokyo. The gauge fell 0.2% on Wednesday.
  • Futures on Japan’s Nikkei 225 retreated 0.5%.
  • Australia’s S&P/ASX 200 Index declined 1.5%.

Currencies

  • The Bloomberg Dollar Spot Index dipped 0.5%.
  • The euro bought $1.1863.
  • The yen was at 104.56 per dollar.
  • The offshore yuan traded at 6.6426 per dollar.

Bonds

  • The yield on 10-year Treasuries jumped three basis points to 0.82%.
  • Australia’s 10-year yield added one basis point to 0.81%.

Commodities

  • West Texas Intermediate crude was at $40.04 a barrel after sliding 4%.
  • Gold was at $1,925.10 an ounce.

— With assistance by Sarah Ponczek, Casey Wagner, Todd White, and George Lei

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