Wall St trades lower as election worries remain in focus

The ASX is set for a soft open amid election jitters, even as the Fed met expectations by keeping rates steady.

Investors are focusing on a tightening US election race. Picture: AP Photo/Richard Drew.

US stocks slipped as the S&P 500 logged its longest string of declines in almost five years.

In Europe, stocks sank as investors worried about the possibility of a Donald Trump presidency.

The Australian share market is set for a modestly negative open, with ASX futures down 16 points at 7.50am (AEDT).

A tightening US presidential race and falling oil prices have pressured the S&P 500, which has finished lower in every trading session since Oct. 25. The index has fallen more than 2 per cent in that period, a shallower fall than its last losing streak of this length, when it lost nearly 8 per cent in the seven sessions ending Nov. 25, 2011, according to WSJ Market Data Group.

Signs of improved corporate earnings, which some investors hoped would boost major indexes, haven’t been enough to shake stocks from their malaise.

The Dow Jones Industrial Average fell 77 points, or 0.4 per cent, to 17960 Wednesday. The S&P 500 lost 0.7 per cent and the Nasdaq Composite declined 0.9 per cent.

Also Wednesday, the Federal Reserve left interest rates unchanged as expected, while sending new hints it expects to raise rates in December.

The prospect of higher interest rates hit yield-sensitive sectors, with utilities, real estate and telecommunications shares in the S&P 500 all declining more than 1 per cent. Those sectors tend to do better when rates are low and investors are seeking dividends and income.

Shares of energy companies fell 1 per cent, falling along with the price of US oil after inventory data showed a much larger-than-expected rise in crude stockpiles. US crude for December delivery slid 2.8 per cent to $US45.34 a barrel, bringing oil’s decline over four sessions to 8.8 per cent.

Tightening polls in the US presidential race also continued to steer market sentiment.

“It looks to me that the election is the looming concern,” said Brian Jacobsen, chief portfolio strategist with Wells Fargo Funds Management. “We got one of the uncertainties out of the way today with the Fed, but clearly the Fed isn’t the biggest concern for investors.”

Some traders said global investors had grown complacent thinking Hillary Clinton would win easily and are now repositioning for the possibility of a Donald Trump victory.

The CBOE Volatility Index, which measures investors’ expectations for stock swings, was on track to climb for a seventh day, the longest such streak since December 2013.

As investors shied away from risk, the dollar fell 0.6 per cent against Japan’s yen to Yen103.394, while gold for November delivery rose 1.6 per cent to $US1,306.80 an ounce, its biggest gain since September.

Sovereign bond yields, which move inversely to prices, came under pressure. The yield on the 10-year US Treasury note fell to 1.799 per cent from 1.822 per cent on Tuesday.

The Stoxx Europe 600 fell 1.1 per cent for its eighth straight session of declines, its longest losing streak since October 2014. Shares in Asia were red across the board, with Japan’s Nikkei Stock Average shedding 1.8 per cent as shares of exporters and banks fell, while Hong Kong’s Hang Seng dropped 1.5 per cent.

“I’ve covered a number of elections in my 20 years, but this has been the most fractious and difficult to watch,” said Kully Samra, managing director at Charles Schwab. Still, he said, earnings and US economic data should be more important for the market in the long run, he said, and an election-related selloff could be short-lived.

Investors were also looking ahead to Friday’s US jobs report, which could further bolster the case for a December rate rise if it shows continued strength in the labor market.

Dow Jones