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Key Points:
- S&P 500 faces pressure as U.S. election uncertainty and restrictive central bank policies globally weigh on trader sentiment.
- Australian shares mirrored this trend, with the S&P/ASX 200 index down 0.4%, led by declines in financials and energy stocks.
Traders are closely watching the S&P 500, which has softened in recent sessions amid heightened volatility, as U.S. polls show a tight race between Donald Trump and Kamala Harris.
The race, now neck-and-neck, suggests prolonged uncertainty that could affect major U.S. indices if results are delayed.
Picture: SP500 holds steady near support as traders await economic cues for direction, as seen on the VT Markets app.
The SP500 index chart shows a mild downward movement, with a recent close around 5719.23. The index also tested support around 5699.05. Breaking below this support could open the way for further declines, while a sustained move above 5728.05 could signal a potential recovery towards previous highs.
In Australia, the Reserve Bank’s decision to maintain rates at a restrictive 12-year high further pressured equities. Financial stocks were particularly affected, echoing weakness in global markets tied to a cautious S&P 500 outlook.
Australian banks saw sharp declines, with Commonwealth Bank of Australia down 0.7% and Westpac sliding 1.5%. The energy sector followed suit, with Woodside and Santos declining 1.1% and 0.7%, respectively, tracking the subdued sentiment impacting the S&P 500’s energy components amid falling oil prices.
Meanwhile, sectors that have recently aligned with the S&P 500’s lower performance, such as consumer staples and real estate, saw additional declines in Australia.
As the U.S. election unfolds, traders expect heightened S&P 500 volatility, with options markets reflecting one of the year’s sharpest spikes in implied volatility.
The outcome will likely shape near-term movements across global equities, with the S&P 500 and indices like the S&P/ASX 200 expected to track each other closely as economic and policy risks remain elevated.
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