By Chibuike Oguh

Global Markets Update

NEW YORK (Reuters) – 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.

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

Gold prices surged to a record high on Monday, remaining little changed at $2,719.33 an ounce. U.S. gold futures settled 0.3% higher at $2,738.9.

Market Performance

The benchmark S&P 500 and Dow finished lower, with defensive stocks including real estate and healthcare among the leading drags. The Nasdaq closed slightly stronger, with Nvidia (NASDAQ: NVDA) finishing at a record high, ahead of a busy week for corporate earnings.

• Dow Jones Industrial Average: -0.80% to 42,931.60
• S&P 500: -0.18% to 5,853.98
• Nasdaq Composite: +0.27% to 18,540.01

European shares index lost 0.66%, while MSCI's gauge of stocks globally fell 0.37%. Overnight in Asia, MSCI's broadest index of Asia-Pacific shares outside Japan closed 0.5% lower.

James St. Aubin, chief investment officer at Ocean Park Asset Management in Santa Monica, California, noted, "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."

Oil and Currency Update

Oil prices settled up nearly 2% after a more than 7% drop last week. Brent crude futures settled up 1.68% at $74.29 a barrel, while U.S. West Texas Intermediate crude futures were 1.94% higher at $70.56.

Markets are pricing in an 89.3% chance for a 25 basis point (bps) cut at the Fed's November meeting, with a 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 climbed, buoyed 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 euro, rose 0.49% to 103.97.

Wasif Latif, president and chief investment officer at Sarmaya Partners, commented, "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."