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Uncertainty About Elections May Weigh On Wall Street

The major U.S. index futures are pointing to a lower opening on Tuesday, with stocks likely to move to the downside following the mixed performance seen in the previous session.

The downward momentum on Wall Street comes amid uncertainty about the outcome of today's highly anticipated midterm elections.

The elections will decide control of both the House and Senate and could have a major impact on President Donald Trump's ability to enact his pro-business agenda.

Democrats are seen with an easier path to retaking the House than the Senate but could still be a significant thorn in Trump's side with control of just the lower chamber.

Traders may be reluctant to make any significant moves, as the outcome of the elections may not be known until tomorrow morning.

Stocks moved in opposite directions during trading on Monday, with the Dow and the S&P 500 adding to last week's strong gains but the tech-heavy Nasdaq extending the sharp pullback seen last Friday.

The major averages ended the day mixed, as the Nasdaq climbed off its worst levels but still closed down 28.14 points or 0.4 percent at 7,328.85. The Dow advanced 190.87 points or 0.8 percent to 25,461.70 and the S&P 500 climbed 15.25 points or 0.6 percent to 2,738.31.

A notable drop by Apple (AAPL) weighed on the Nasdaq, with the tech giant slumping by 2.8 percent to a three-month closing low.

Apple extended the sell-off seen in the previous session after a report from Japan's Nikkei newspaper said demand for the company's iPhone XR appears to be disappointing.

Online retail giant Amazon (AMZN) also came under pressure after President Donald Trump told Axios his administration is looking into antitrust violations by the company.

Overall trading was somewhat subdued, however, with traders reluctant to make significant moves ahead of Tuesday's highly anticipated midterm elections, which will decide control of both the House and Senate.

Democrats are seen as having a much better chance to claim a majority in the House than in the Senate, but controlling the lower chamber would still allow Democrats to hinder Trump's agenda.

The Federal Reserve's looming monetary policy announcement also kept some traders on the sidelines, with the Fed due to announce is latest decision on Thursday.

While the Fed is widely expected to leave interest rates unchanged, traders will keep a close eye on the accompanying statement for clues about an expected rate hike in December.

Meanwhile, traders largely shrugged off a report from the Institute for Supply Management showing a modest slowdown in the pace of growth in the service sector in the month of October.

The ISM said its non-manufacturing index dipped to 60.3 in October after climbing to 61.6 in September, although a reading above 50 still indicates growth in the service sector. Economists had expected the index to drop to 59.3.

Last month, the ISM said the non-manufacturing index unexpectedly rose in September, reaching its highest level since the inception of the composite index in 2008.

Natural gas stocks showed a substantial move to the upside on the day, driving the NYSE Arca Natural Gas Index up by 4 percent. With the jump, the index climbed further off the more than two-year closing low set last Monday.

The rally by natural gas stocks came amid a sharp increase by the price of the commodity, with natural gas for December delivery surging up $0.283 to $3.567 per million BTUs.

Significant strength was also visible among tobacco stocks, as reflected by the 3 percent spike by the NYSE Arca Tobacco Index.

Oil and oil service, pharmaceutical, commercial real estate and utilities stocks also saw notable strength on the day, while semiconductor stocks moved to the downside.

Commodity, Currency Markets

Crude oil futures are inching up $0.03 to $63.13 barrel after edging down $0.04 to $63.10 a barrel on Monday. Meanwhile, after slipping $1 to $1,232.30 ounce in the previous session, gold futures are rising $2.60 to $1,234.90 an ounce.

On the currency front, the U.S. dollar is trading at 113.14 yen compared to the 113.19 yen it fetched at the close of New York trading on Monday. Against the euro, the dollar is valued at $1.1434 compared to yesterday's $1.1407.

Asia

Asian markets ended on a mixed note on Tuesday after a cautious session ahead of the U.S. midterm elections and the Federal Reserve's monetary policy announcement.

Stocks in mainland China edged lower, with software and telecom sections seeing notable declines. The Shanghai Composite Index edged down 6.07 points or 0.2 percent to 2,659.36. Meanwhile, Hong Kong's Hang Seng Index climbed 186.57 points or 0.7 percent to 26,120.96.

The Japanese markets showed a strong move to the upside, with the benchmark Nikkei 225 Index jumping 248.76 points or 1.1 percent to 22,147.75.

Chiyoda Corp. and Sumitomo Dainippon Pharma both surged up by over 7 percent. Daiichi Sankyo, Toyota Tsusho Corp., Marubeni Corp. and Sojitz Corp. also advanced by 4 to 5 percent.

Meanwhile, Pioneer Corp., Dainippon Screen Manufacturing and Shimizhu Corp. lost 4 to 5 percent. Softbank Corp., TDK, Tokyo Electron and Olympus Corp. were also among the prominent losers.

Australian stocks also ended notably higher. The benchmark S&P/ASX 200 Index climbed up 57.10 points or 1 percent to 5,875.20 while the broader All Ordinaries Index ended up 53.90 points or 0.9 percent at 5,958.70.

The Reserve Bank of Australia left its benchmark interest rate on hold at a record low for the 26th consecutive meeting. The board of the Reserve Bank of Australia voted to maintain the cash rate at 1.5 percent. The interest rate has been at the current level since August of 2016.

"Taking account of the available information, the Board judged that holding the stance of monetary policy unchanged at this meeting would be consistent with sustainable growth in the economy and achieving the inflation target over time," the bank said in a statement.

Policymakers observed that the low level of interest rates is continuing to support the Australian economy. Although they expect further progress in the reduction of unemployment and inflation returning to target, the bank noted progress is likely to be gradual.

Incitec Pivot, Bellamys Australia, Syrah Resources and Western Areas turned in some of the market's best performances on the day.

Shares of Appen Limited, Skycity Entertainment Group and CYBG lost more than 2 percent, while Infigen Energy shed about 1.9%.

Meanwhile, stocks in Singapore declined sharply, with the benchmark Straits Times Index plunging 1.8 percent. Markets in Indonesia, Malaysia and Taiwan also declined, albeit with less pronounced losses.

In economic news, average household spending in Japan was down 1.6 percent year-over-year in September at 271,273 yen, the Ministry of Internal Affairs and Communications said. That was well shy of expectations for an increase of 1.5 percent and down sharply from the 2.8 percent gain in August.

South Korea had a current account surplus of $10.83 billion in September, up from $8.44 billion in August, data from the Bank of Korea showed.

Europe

Following the mixed performance seen in the previous session, European stocks have moved mostly lower during trading on Tuesday.

Worries about global economy due to the ongoing trade dispute between the U.S. and China and uncertainty about the outcome of the U.S. midterm elections are contributing to the weakness in the markets.

While the U.K.'s FTSE 100 Index has slumped by 1.1 percent, the French CAC 40 Index is down by 0.6 percent and the German DAX Index is down by 0.4 percent.

On the economic front, survey data from IHS Markit showed the Eurozone private sector expanded at the weakest pace in over two years in October, as both manufacturing and services recorded slower rates of growth.

The composite Purchasing Managers' Index fell to 53.1 in October from 54.1 in September. The reading was the lowest since September of 2016. The flash reading for the composite PMI was 52.7.

A separate report from Eurostat showed Eurozone producer price inflation accelerated for a fifth straight month in September.

Producer prices grew 4.5 percent year-over-year following a 4.3 percent increase in August, which was revised from 4.2 percent. Economists had forecast 4.3 percent growth.

Meanwhile, preliminary data released by the Federal Statistical Office showed German factory orders grew for a second straight month in September, defying expectations for a drop.

Manufacturing new orders rose a price, calendar and seasonally adjusted 0.3 percent in September following a 2.5 jump in August. Economists had forecast a 0.5 percent decline.

U.S. Economic Reports

At 10 am ET, the Labor Department is due to release its report on job openings in the month of September. Job openings are expected to dip to 7.110 million in September after rising to 7.136 million in August.

The Treasury Department is scheduled to announce the results of its auction of $27 billion worth of ten-year notes at 1 pm ET.

Stocks In Focus

Shares of Becton, Dickinson and Co. (BDX) are moving notably lower in pre-market trading after the medical device manufacturer reported better than expected fiscal fourth quarter results but forecast fiscal 2019 earnings below analyst estimates.

Car rental company Avis Budget (CAR) may also come under pressure after reporting third quarter earnings below analyst estimates and narrowing its full-year guidance.

Shares of Marriott (MAR) are also likely to see initial weakness after the hotel operator reported third quarter earnings that exceeded expectations but weaker than expected revenues. Marriott also cut its current quarter forecast for revenue per available room.

On the other hand, shares of Mylan (MYL) are seeing significant pre-market strength after the drug market reported third quarter earnings that exceeded expectations and expressed optimism about its long-term growth prospects.

Priceline parent Booking Holdings (BKNG) is also likely to move to the upside after reporting weaker than expected third quarter earnings but providing strong current quarter earnings and revenue guidance.

Shares of Mosaic (MOS) may also see initial strength after the fertilizer maker reported third quarter earnings that came in well above analyst estimates.

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