Global equity markets lose ground as geopolitical tensions, U.S. election uncertainty linger

ters) -Global equity markets lost ground on Monday as traders remained cautious amid rising geopolitical tensions and uncertainty over the U.S. presidential election, helping to push gold futures to new highs.

World equity markets slipped on Monday as traders remained cautious amid rising geopolitical tensions and uncertainty over the U.S. presidential election, pushing gold futures to new highs.

The Israeli military pressed on with its attacks on Lebanon's Hezbollah militant group, prompting hundreds of Beirut residents to flee their homes late on Sunday as explosions rocked the Lebanese capital.

Gold prices hit a record high on Monday and were last up 0.1% at $2,719.33 an ounce. U.S. gold futures settled 0.3% higher at $2,738.9.

The benchmark S&P 500 and Dow industrials ended lower, with defensive sectors such as real estate and healthcare among the biggest drags. The Nasdaq closed slightly higher, with Nvidia hitting a record high, ahead of a busy week for corporate earnings.

The Dow Jones Industrial Average fell 0.80% to 42,931.60, the S&P 500 lost 0.18% to 5,853.98 and the Nasdaq Composite gained 0.27% to 18,540.01.

The pan-European STOXX 600 index lost 0.66%, while MSCI's gauge of stocks across the globe fell 0.37%. In overnight trading, MSCI's broadest index of Asia-Pacific shares outside Japan closed 0.5% lower.

"There's just tension around the earning season kicking off in earnest and then, of course, the elections two weeks away even though we haven't had the typical anxiety over elections that we normally see in September and October," said James St. Aubin, chief investment officer at Ocean Park Asset Management in Santa Monica, California.

Markets are pricing in a 89.3% chance for a cut of 25 basis points (bps) at the Fed's November meeting, with an 10.7% chance of the central bank holding rates steady, according to CME's FedWatch Tool. The yield on benchmark U.S. 10-year notes rose 11.9 basis points to 4.194%.

The dollar firmed, helped by a rise in U.S. bond yields. The euro was down 0.46% at $1.0815, while the pound weakened 0.51% to $1.2982. Against the Japanese yen, the dollar strengthened 0.86% to 150.79.

The European Central Bank (ECB) last week cut rates for the third time this year. Data on Monday showed German producer prices fell more than expected in September.

The dollar index, which tracks its performance against a basket of currencies including the yen and the euro, rose 0.49% to 103.97.

"Between the combination of escalating or still-high Middle East tensions, and we're only a handful of days away from the (U.S. election), it could be that the market is getting nervous ahead of that and people are squaring some of their positions," said Wasif Latif, president and chief investment officer at Sarmaya Partners.

(Reporting by Chibuike Oguh in New York; editing by Tomasz Janowski and Stephen Coates)

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