Trump refusing to guarantee a peaceful transfer of power should he lose to Joe Biden
US stocks ended sharply lower overnight, with renewed pressure in key tech stocks dragging down the broader market amid worries over a coronavirus second wave and an increasingly contentious US presidential election. Federal Reserve Chairman Jerome Powell told a congressional panel that further fiscal stimulus is still needed for the U.S. economic recovery to continue. Meanwhile, chances for another Congressional aid package are withering ahead of the U.S. election. As a result, the Dow slid 1.9%, the S&P 500 dropped 2.4% and the Nasdaq Composite closed 3% lower.
Asian equities were lower on Thursday as caution set in after a retreat in the United States driven by a decline in technology shares. The selling pressure in the markets increased amid fears of an extended battle over the US election result, with Donald Trump refusing to guarantee a peaceful transfer of power should he lose to Joe Biden. Japan’s benchmark Nikkei 225 declined 1.1%, Australia’s S&P/ASX 200 slipped nearly 1.0%, South Korea’s Kospi plunged 2.59%, while the Shanghai Composite was down 1.7%.
In Europe, stocks retreated Thursday amid a second wave of coronavirus cases. The number of daily reported cases in the U.K. has jumped by a quarter in the past day. The pan-European Stoxx 600 fell over 1% in early trade despite the Ifo economist said the German industry continued to recover while export expectations improved significantly.
The dollar keeps steady after the extended ascent seen on Wednesday. The USD demand is mostly due to a more worrying coronavirus situation in Europe compared to the US. Also, the prevailing risk aversion supports American currency. As a result, EURUSD dipped to late-July lows below 1.1650, with downside risks persisting as long as the euro stays below the 20-DMA that arrives marginally above 1.18. Later today, US jobless claims data could affect dynamics in USD-pairs.