United States President Donald Trump said last month his administration planned to produce a resolution calling for a 10 percent tax cut for middle-income households.
“Everyone still remembers strong equity rallies after Trump was elected two years ago. So initially stock markets will gain,” Norihiro Fujito, chief investment strategist at Mitsubishi UFJ Morgan Stanley Securities, told Reuters.
“But further tax cuts would boost already large fiscal deficits and push the 10-year U.S. Treasuries yield above its October high almost instantly. Given rises in U.S. bond yields triggered a correction in equities last month, any rally in stocks is unlikely to last long,” he added.
Middle East markets
Saudi Arabia’s index dropped 0.6 percent on Monday with National Medical Care falling 10 percent after the company reported a drop in quarterly net profit.
Al Rajhi Bank and Saudi Basic Industries Corp (SABIC) both fell by 0.5 percent.
Dubai’s index ended the day mainly flat as a rise in real estate shares was offset by a 1.5 percent drop in Emirates NBD’s shares.
Abu Dhabi’s index rose 1.1 percent, helped by a 1.6 percent rise in First Abu Dhabi Bank and a 7 percent surge in investment firm Waha Capital.
Qatar’s index booked a 1.2 percent gain, closing the day at its highest level since April 2017, aided by a 2.3 percent rise in Qatar National Bank and a 2.5 percent gain in Qatar Islamic Bank.
Egypt’s index added 0.5 percent, Kuwait’s index edged down 0.1 percent, Bahrain’s index edged up 0.1 percent and Oman’s index edged 0.2 percent lower.
Oil prices dropped on Tuesday on concerns over tightening demand as a result of an economic slowdown.
U.S. West Texas Intermediate (WTI) crude futures were at $62.93 a barrel at 0131 GMT, down 17 cents, or 0.3 percent, from their last settlement.
International Brent crude oil futures were down 21 cents, or 0.3 percent, at $72.96 a barrel.
Jameel Ahmad, head of market research at futures brokerage FXTM, told Reuters that the “sanctions on Iran have been...priced into the oil markets a long time ago”, and that he would “instead focus more heavily on the global demand outlook because of the ongoing external uncertainties weighing down on economic prospects.”
The dollar steadied against its major rivals as investors were cautious ahead of U.S. midterm elections later in the day.
Gold prices were steady on Tuesday ahead of U.S. midterm elections.
On Monday, Spot gold was down 0.1 percent at $1,230.76 per ounce by 1830 GMT, trading in an $8 range. U.S. gold futures settled down $1, or 0.1 percent, at $1,232.30.
(Writing by Gerard Aoun; Editing by Mily Chakrabarty)
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