U.S. elections spur uncertainty in European markets

Tuesday saw caution on European stock markets as investors around the world watched the United States’ midterm elections.

By mid-morning, the pan-European Stoxx 600 had recovered its opening losses of over 0.5%, moving 0.2% higher. While oil and stock prices plummeted, tech stocks rose 1.6%, and major European bourses as a whole had a mixed day.

The results of the elections will determine which party controls Congress, which may have an impact on how money is allocated going forward. Democrats presently hold a majority in the Senate and the House. An increase in support for oil and gas firms could trail a Republican victory, for example.

Investors are also anticipating the release of the U.S. consumer price index report on Thursday, which will provide further information about the Federal Reserve’s initiatives to combat inflation. Investors may be alerted by a strong inflation report that a shift away from higher interest rates for an extended period may be further away than anticipated.

Following a solid session for markets domestically, stocks in the Asia-Pacific region were broadly higher on Tuesday, while U.S. stock futures were flat in early premarket action.