Stocks Slide, Yields Up On "Higher for Longer" Rates View

Global stocks dipped on Tuesday, while bond yields and the dollar remained near multi-month highs as investors adjusted expectations for significant U.S. interest rate cuts ahead of the November 5, 2024, election, Medha Singh and Tom Westbrook reported for Reuters.

One exception to the equities downturn was European software giant SAP, which surged to an all-time high after raising its full-year targets. I Photo: Vladislav Bezrukov Wikimedia Commons

One exception to the equities downturn was European software giant SAP, which surged to an all-time high after raising its full-year targets. The MSCI All-World Index fell 0.2%, while U.S. futures pointed to another weak opening after Monday's drop in benchmark indices.

"We’re getting very close to the U.S. election, and the data in the U.S. has been strong. So, there is a question about how much the Fed can do," said Peter Schaffrik, global macro strategist at RBC Capital Markets.

The likelihood of the U.S. Federal Reserve delivering a quarter-point rate cut at its November 7 meeting has fallen to 87% from near certainty a week ago, according to the CME’s FedWatch tool.

A series of positive U.S. economic reports have dampened expectations for a major rate cut, following the Fed's decision to cut rates by half a point in September. Adding to the uncertainty is the closely contested U.S. election, where Harris holds a narrow 46% to 43% lead over Trump according to nationwide polling by Reuters.