Asian markets experienced a dip, and U.S. stock futures fell following the debate between U.S. Vice President Kamala Harris and former President Donald Trump. Reuters reported that this reaction from the markets reflects the uncertainty stemming from the first presidential debate, where candidates discussed key issues like abortion, the economy, immigration, and Trump’s legal troubles.
Market Reactions
Investors in Asian markets appeared nervous, particularly as they awaited upcoming U.S. inflation data, which could influence the Federal Reserve’s policy decisions next week. The MSCI index, which tracks stocks in Asia, dropped by 0.25%, while futures on the S&P 500 declined by 0.38%. The U.S. dollar also weakened slightly.
The debate took place after Harris entered the presidential race following President Joe Biden’s withdrawal in July. This late entry has intensified the competition for the presidency, leading to a reversal of previous market bets that had anticipated a second term for Trump.
Investor Focus on Fiscal Policy
While the debate may not have an immediate impact on short-term monetary policy, investors are closely watching the fiscal policies and economic plans of the candidates. Rob Carnell, head of research at ING in the Asia-Pacific region, noted that Harris seemed to handle Trump well during the debate. He added that if Trump had performed better, we might have seen a stronger dollar, suggesting that the market might be slightly favoring Harris.
The dollar index, which measures the U.S. currency against six others, fell by 0.21% to 101.43. Japan’s Nikkei index dropped by 0.8%, Chinese stocks also declined, with the Shanghai Composite down by 0.75%, and Hong Kong’s Hang Seng index fell by 1%. The dollar remained under pressure, while the Japanese yen strengthened by 0.6% to 141.51 per dollar, its highest level since January.
Oil Prices Stabilize
In the commodities market, oil prices stabilized on Wednesday after a significant drop of more than 3% in the previous session. Prices hovered near their lowest levels in three years after OPEC+ revised its demand forecast for this year and 2025. Brent crude futures were up 0.68%, reaching $69.65 per barrel, while U.S. West Texas Intermediate (WTI) crude rose by 0.75% to $66.25 per barrel.
