US stocks fall after Democrat victory in bitter Senate poll

US STOCK futures, Treasury yields and the dollar fell yesterday as Democrat Doug Jones beat Republican Roy Moore in a bitter US Senate race in Alabama, while Asian shares edged up as crude oil futures took back lost ground.

Jones’s victory could mean trouble for President Donald Trump and his populist political base. It would narrow the Republicans’ already slim majority in the Senate, possibly making it harder for Trump to advance his policy agenda.

The election temporarily seized the spotlight from the Federal Reserve, which was widely expected to raise interest rates later yesterday and could provide clues about the timing of future US policy moves.

S&P e-mini futures were down as much as 0.3%, compared to their 0.1% drop before the Alabama polls closed.

The dollar index, which tracks the greenback against a basket of six major rival currencies, was down 0.2% at 93.948, pulling away from three-week highs on Tuesday.

The dollar slumped 0.3% to 113.26 yen (R13.58), while the euro rose 0.1% to $1.1758 (R15.95).

“Heading into tonight, this reaction could be an opportunity for people to pick up some dollars ahead of the Fed meeting,” said Bart Wakabayashi, the branch manager for State Street Bank in Tokyo.

“While the hike is still priced in, I would still be core-long ahead of the Fed,” he said.

The 10-year Treasury yield slipped to 2.3% from its US close on Tuesday of 2.4%

MSCI’s broadest index of Asia-Pacific shares outside Japan was up 0.1%.

Japan’s Nikkei stock index was 0.5% lower in afternoon trade, pressured by a stronger yen and shrugging off upbeat economic data that showed Japanese core machinery orders rose 5% in October.

On Wall Street , the Dow Jones Industrial Average and the S&P 500 both notched record closing highs, although the Nasdaq Composite shed 0.19%. Bitcoin was down 1.1% on the Bitstamp exchange at $16 465.09 (R22 3605).

The Fed will conclude its two-day policy meeting and is seen raising its benchmark rate to between 1.25% and 1.5%, with investors focusing on clues to the pace of tightening next year.

Concerns that the central bank would take a slower pace of tightening due to cool inflation were partly alleviated by data that showed US wholesale inflation rose last month. – Reuters/African News Agency (ANA)