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* Futures down: Dow 0.24 pct, S&P 0.26 pct, Nasdaq 0.35 pct
By Sruthi Shankar
Nov 6 (Reuters) - U.S. stock index futures edged lower on Tuesday, as investors stayed away from making big bets ahead of the U.S. midterm elections that could shape the future of Donald Trump’s presidency and test his tax and trade policies.
The cautious mood set in as investors broadly braced for opposition Democrats to take over the House of Representatives and Trump’s Republican Party to retain the Senate.
A political gridlock between the White House and Congress could hinder Trump’s pro-business agenda and raise concerns about political instability, but most analysts say that is not the worst-case scenario for stocks.
If the Republicans retain their House majority, stocks are likely to rally on hopes of more tax cuts, but if the Democrats sweep both the House and the Senate, there could be a sharp selloff.
“When you consider how markets have done since (Trump’s) election victory – granted, primarily on the back of tax reforms – it’s easy to see why this may not be the most investor-friendly result,” said Craig Erlam, senior market analyst at Oanda in London.
Uncertainty about the elections dominated investors’ minds, despite positive reports on trade. Chinese Vice President Wang Qishan said the country was ready to hold discussions and work with the United States to resolve trade disputes.
The world’s two biggest economies are expected to hold top-level diplomatic and security talks in Washington on Friday.
At 7:10 a.m. ET, Dow e-minis were down 60 points, or 0.24 percent. S&P 500 e-minis were down 7 points, or 0.26 percent and Nasdaq 100 e-minis were down 24.5 points, or 0.35 percent.
Despite an Apple-led weakness in technology stocks on Monday, the S&P 500 ended half a percent higher as investors bought defensive stocks such as real estate, consumer staples and utilities.
Among stocks, Mylan NV jumped 10 percent in premarket trading after the drugmaker beat analysts’ estimates for third-quarter profit.
Eli Lilly also rose 3.5 percent after its quarterly profit more than doubled, helped by higher demand for its newer treatments such as diabetes drug Trulicity and psoriasis medicine Taltz.
Booking Holdings gained 6 percent after the online travel agency forecast fourth-quarter profit above estimates. (Reporting by Sruthi Shankar in Bengaluru; Editing by Anil D’Silva)