Global stocks rattle as investors weigh US election risk, earnings

Shares globally slipped on Wednesday as the investors stayed wary ahead of the US election, while British stocks fell as the UK government unveiled major tax hikes, and gold hit a record high in the wider risk-off mood.

With tepid appetite for risk, the Euro STOXX 600 fell 1.3% to its lowest in five weeks, with bad news on earnings news outweighing brighter reports. Italian spirit maker Campari slumped 15% after missing forecasts.

Investors were also digested a slew of economic data. The euro zone grew faster than expected last quarter, data showed, though the outlook remains weak in part due to threats of tariffs from a potential Donald Trump presidency.

In the US., data showed the economy had maintained a steady pace of third-quarter growth.

British stocks fell as much as 0.7% to their lowest in over 11 weeks as UK Finance Minister Rachel Reeves said she would raise taxes by 40 billion pounds a year ($52 billion) in her first budget.

The pound extended losses against the dollar and slipped against the euro, during Reeves’ speech, while yields on British government bonds also fell. Sterling traders had rushed to hedge against big price moves ahead of the UK budget.

“When it comes to macro, and the impact of geopolitics on macro, things look in decent shape,” said Samy Chaar, chief economist at Swiss private bank Lombard Odier in Geneva.

“The only question investors have in mind is how are the US elections going to impact or challenge this kind of current state of affairs.”

Wall Street futures turned negative, as investors weighed mixed corporate results and the economic data.

Futures has been buoyed by a solid result from Google-parent Alphabet, which reported quarterly revenue that beat estimates. But semiconductor company Advanced Micro Devices dropped 7.6% in premarket trading after its revenue forecasts and AI chip sales disappointed investors.

Other chipmakers also slipped, with Nvidia down 0.9% and Intel losing 1%.

Meanwhile, gold rose to an all-time high of $2,784.82 an ounce, while the dollar gained 0.2% to trade near a three-month high against a basket of currencies.

Among riskier assets, bitcoin was one of few gainers, flirting with a record peak as markets weigh the prospect of a victory by Trump, widely seen as favourable towards crypto.

Facebook owner Meta Platforms and Microsoft report their earnings later in the day, followed by Apple and Amazon.com on Thursday. Investors were also assessing US data this week that could guide the outlook for Federal Reserve monetary policy.

US private payrolls growth surged in October, despite fears of temporary disruptions from hurricanes and strikes, the ADP National Employment Report showed.

Data on Tuesday had showed US job openings dropped to more than a 3-1/2-year low in September.

Earlier in Asia, MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.8% to a one-month low, tracking a decline in Chinese assets.

Next week’s US election could have huge ramifications for the world’s second-largest economy, even as Beijing steps up efforts to shore up growth.

Reuters reported on Tuesday that China is considering approving the issuance of more than 10 trillion yuan ($1.4 trillion) in extra debt in the next few years to revive its fragile economy.

“Foreign investors are still highly concerned about potential tariff threats if next week’s U.S. elections result in a Republican sweep,” said Saxo’s chief investment strategist Charu Chanana.

In commodities, Brent crude futures ticked up 1.5% to $72.17 a barrel, while U.S. West Texas Intermediate crude futures CLc1 rose 1.3% to $68.05 per barrel.

Futures tied to Canada’s main stock index fell on Wednesday as cautious investors awaited key economic data from the United States in the run up to the U.S. presidential election next week.

Investors were squarely focused on major U.S. economic data, including advance third-quarter gross domestic product figures and the ADP National Employment report due later in the day.

The looming U.S. elections gave a bout of jitters to the global markets as investors weighed the prospect of Donald Trump’s victory.

Wall Street futures rose on Wednesday as investors cheered Google parent Alphabet’s strong quarterly results, which marked the beginning of this week’s earnings from five of the “Magnificent Seven” megacap companies.

Canada’s energy sector could benefit with oil prices climbing as markets weighed a potential ceasefire between Israel and Hezbollah as well as the rising OPEC+ crude supplies against a possible drop in U.S. fuel stocks and demand concerns.

Materials shares came under focus as gold prices hit a record high on safe-haven demand ahead of the U.S. election, while copper prices remained muted.

The TSX composite index ended slightly lower on Tuesday as rising long-term bond yields pressured interest-rate sensitive stocks.

In corporate news, Air Canada will increase direct flights between China and Canada from December, the news arm of China’s aviation regulator said, after Ottawa removed a 2022 limit on how many services Chinese carriers could fly to Canada.

Agencies