Dollar, US stock futures hold steady as presidential election kicks off

The dollar and US stock futures held steady as voting kicks off in a closely contested presidential race between Donald Trump and Kamala Harris. Investors are treading cautiously amid the potential for a prolonged vote count in this highly charged election.

The dollar index remained flat after a sharp drop Monday as traders adjusted positions on the election outcome. S&P 500 futures were unchanged, while European stocks extended losses. Meanwhile, yields on 10-year Treasuries rose three basis points.

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“The uncertainty around the election is visible across all markets—equities, bonds, and currency,” said Alexandre Hezez, CIO at Groupe Banque Richelieu. Hedge funds are leaning toward dollar-weakening currency options in case of a Harris win, while a Trump victory may give the dollar a temporary lift, noted Chris Weston of Pepperstone Group.

Markets will also watch Thursday’s Federal Reserve decision and upcoming corporate earnings.

Key events this week:

• Tuesday: US trade, ISM Services index, Presidential Election.
• Wednesday: Brazil, New Zealand, Poland rate decisions; Taiwan, Vietnam CPI; ECB Lagarde speech.
• Thursday: China trade, Eurozone retail sales, Mexico CPI; Rate decisions from Norway, Peru, Sweden, UK, US Fed (plus jobless claims and productivity).
• Friday: Brazil inflation, Canada employment, Chile CPI, Taiwan trade, US consumer sentiment; Fed Gov. Michelle Bowman speaks.