U.S. Futures Declined Along with European Ones on Tuesday

U.S. futures tumbled down on Tuesday to the lowest point in nearly two weeks as Congress remained apart on a new government stimulus deal, lessening hopes for a breakthrough before the presidential election. Treasuries also plunged lower along with the dollar.

The S&P 500 Index decreased by more than 1.5% as opposition to a Covid-19 aid package hardened in the Republican-controlled Senate. Meanwhile, House Speaker declared that her caucus negotiators are still trying to reach a deal. According to new data, key parts of the U.S. economy are hindering two weeks ahead of the vote. Furthermore, Federal Reserve officials issued a warning that the economic growth will slow if authorities won’t agree on additional federal spending.

Overall, the S&P 500 Index plummeted down by 1.6% on Tuesday, while the Nasdaq 100 dropped by 1.8% and the Dow Jones Industrial Average declined by 1.4%. The Stoxx Europe 600 Index also lowered by 0.3%. On the other hand, the MSCI Asia Pacific Index surged forward by 0.8%, and the MSCI Emerging Market Index increased by 0.5%.

Before lowering, futures had advanced overnight on signs of progress toward a deal. Besides, the latest data from China showed its economy continues to rebound. That news also bolstered the sentiment. 10-year Treasury yield jumped above 0.76%, while the greenback weakened against its major peers.

Christopher Grisanti, the chief equity strategist at MAI Capital Management, stated that the hope that authorities agree on a stimulus deal before the election fades. However, the market was pricing in some kind of stimulus, and investors are disappointed.

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What’s happening in Europe?

In Europe, stocks plummeted down while the British pound rallied by the most since August. British officials hinted that they were ready to water down controversial lawbreaking Brexit legislation. Such a move could renew talks with the European Union over future trading relationships.

Meanwhile, oil plunged ahead of an OPEC+ meeting. Investors wanted to assess the state of the market. Especially, as demand is coming under pressure from the threat of new coronavirus restrictions.

Analysts think that Brexit trade talks will likely continue at least into next week. Furthermore, Australia’s central bank minutes are out on Tuesday.

In the U.S., the final presidential debate before the election, between President Donald Trump and former Vice President Joe Biden, will be live on Thursday as well. Investors are waiting for the results of these events and avoiding sharp moves for now.