US election is just one risk among many for nervous stock market

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Kamala Harris,Economic Uncertainty,Cboe Volatility Index

Growing risks to the U.S. stock rally are spurring demand for portfolio hedging, options markets showed, as investors grapple with U.S. economic uncertainty,...

FILE PHOTO: U.S. Vice President Kamala Harris and former U.S. President Donald Trump in combo photographNEW YORK - Growing risks to the U.S. stock rally are spurring demand for portfolio hedging, options markets showed, as investors grapple with U.S. economic uncertainty, shifting Federal Reserve policy and a looming presidential election.

This year, however, political concerns have coalesced with more pressing catalysts for volatility, such as worries over a potentially softening U.S. economy and uncertainty over how deeply the Fed will need to cut interest rates, investors said. The S&P 500 notched its worst weekly percentage loss since March 2023 last week after a second-straight underwhelming jobs report, though the index is still up nearly 15% this year.

In the 2020 and 2016 election cycles, the futures curve presented a 7.3 and 3.4 point gap, respectively, between the months with the highest and lowest volatility, a Reuters analysis of LSEG data showed.The VIX has been in sharper-than-usual focus for investors in recent weeks after the index posted its largest ever one-day spike on Aug. 5, during a sharp market sell-off spurred by economic worries and an unwinding of the global yen carry trade.

Ukraine-Russia war latest: Kyiv launches drone attack on Moscow as Putin’s forces capture new villageDuring Monday Night Football, the San Francisco 49ers took a moment to honor two heroes who helped one of their own.DEIR AL-BALAH, Gaza Strip — An Israeli strike on a crowded tent camp housing Palestinians displaced by the war in Gaza killed at least 40 people and wounded 60 others early Tuesday, Palestinian officials said.

 

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