Asia Stocks Fall Ahead of US Midterm Vote

South Korea’s market fell as much as 4.1%, Taiwan dropped 3.3% and European futures pointed lower before the open, with DAX futures off about 0.8% and FTSE futures down around 0.5%. Wall Street had already set a cautious tone, with the S&P 500 slipping 0.5% on Monday as investors weighed tech-sector weakness and losses in Apple against stronger US manufacturing data.

The Treasury market also reflected the tension. The yield on the 10-year US note rose 2.1 basis points to 4.913%, keeping pressure on rate-sensitive assets and reinforcing the idea that the market is still wrestling with a higher-for-longer yield backdrop.

For investors, the bigger signal is that politics is becoming a volatility catalyst again. The dollar firmed 0.4% against the Chinese yuan to 6.6724 after the People’s Bank of China moved to raise the foreign-exchange deposit reserve ratio for financial institutions to 6% from 4% from Nov. 15, a step that underscores Beijing’s discomfort with currency weakness. The dollar index held at 101.78 after touching a one-month low the day before, suggesting the greenback is still searching for direction even as election risk lifts demand for safety.

Crypto was another pressure point. Bitcoin traded above $76,600 and ether around $2,250 after last week’s hack at Binance triggered net customer withdrawals of $4.72 billion, a reminder that digital assets remain highly vulnerable to shocks in liquidity and trust. That matters beyond the coins themselves: every crypto downdraft tends to spill into market sentiment around speculative growth, leverage and high-beta trades.

The investment takeaway is straightforward: this is a classic risk-off setup where policy uncertainty, higher yields and fragile confidence are converging. If the post-election landscape produces more political volatility than clarity, the beneficiaries are likely to be the usual havens — the dollar, Treasuries and defensive assets — while Asia exporters, semiconductors and speculative crypto-linked names remain exposed. The smarter positioning is to stay selective, keep dry powder and focus on assets with pricing power and balance-sheet strength until the political fog clears.