US pre-open: Futures little changed ahead of midterms

Wall Street futures had stocks opening slightly higher ahead of the bell as market participants prep for the outcome of the US midterm elections.

As of 1130 GMT, Dow Jones futures were up 0.13%, while S&P 500 and Nasdaq-100 futures had the indices opening 0.12% and 0.36% firmer, respectively.

The Dow Jones closed 423.78 points higher on Monday, extending gains recorded in the previous session.

Tuesday's primary focus will be the US midterms, with the result of which set to determine which side of the aisle controls Congress and has the power to steer future policy and spending. Market reactions will almost certainly depend on whether or not Republicans can take back control of the House of Representatives, the Senate, or both.

The midterms may also set the stage for Donald Trump's potential return to the White House, with the former president announcing he will "be making a very big announcement" on Tuesday at Mar-a-Lago. Trump is currently bookmakers' favourite to win the top job in 2024.

Markets.com's Neil Wilson said: "Those US midterm elections today might keep investors on the sidelines a bit before they make any major decisions. Looking for the shakeout once the predictions come in later before we see any significant fresh direction. This and inflation later this week are the main drivers for US equities. At present the idea of gridlock in Congress and slight softening of CPI is boosting sentiment. Gridlock or even a Republican clean sweep could result in more fiscal restraint, lower rates uncertainty, and be a catalyst for further gains into the year-end.

"My problem is that everyone seems to be saying that the market can/should/will rally after the midterms and it's been a long time since one happened in a bear market so no one really knows if the bullish dynamic plays out the same this time around. My hunch is maybe stocks go a bit higher into Dec and then some uncertainty about the Fed will cool it off…as long as inflation does come in hot on Thursday."

On the macro front, the National Federation of Independent Business' October small business optimism index will be published at 1200 GMT.

In terms of earnings, Walt Disney and AMC Entertainment will both report their latest set of quarterly results on Tuesday.

Reporting by Iain Gilbert at Sharecast.com