TOKYO (AP) — Asian stocks were mixed Tuesday ahead of the U.S. midterm elections with trading likely to stay bumpy in a week that brings new inflation data and other events that could shake markets.

Tokyo’s Nikkei 225 gained 1.4% to 27,914.21 on strong earnings reports. The Kospi in Seoul advanced 1.1% to 2,398.02 and Australia’s S&P/AXS 200 gained 0.4% to 6,959.60.

Hong Kong’s Hang Seng edged 7 points lower to 16,588.79 while the Shanghai Composite index shed 0.5% to 3,061.94.

Trading is likely to stay bumpy in a week full of events that could shake markets, including U.S. inflation data and the election, which could leave the U.S. government split between Democrats and Republicans.

Every seat in the U.S. House of Representatives is up for election this year, along with about a third of the U.S. Senate. On the line is control of both houses of Congress, currently under Democratic leadership.

Voters are also electing governors in most of the states this year. They’ll be in office in 2024 when the next presidential election happens and could affect election laws or vote certifications. Many state legislative and local authorities also are on the ballot.

A divided government would likely bring gridlock rather than big, sweeping policy changes that could upset tax and spending plans. Historically, when a Democratic White House has shared power with a split or Republican Congress, stocks have seen stronger gains than usual.

On Monday, the benchmark S&P 500 rose 1% to 3,806.80 while the Dow Jones Industrial Average gained 1.3% to 32,827.00 and the Nasdaq composite added 0.9% to 10,564.52.

Analysts say a strong performance by Democrats in the elections could lead to increased spending to help the economy that might fuel inflation and leave the Federal Reserve obliged to continue to hike interest rates to get prices under control.

It may take a while to get clarity because of the process to count votes that came in through the mail.

A report scheduled for Thursday will provide an update on inflation was across the country last month. That will influence what’s been the main driver on Wall Street this year: what the Federal Reserve does on interest rates.

Economists expect the report to show the consumer price index rose 8% in October from a year earlier, slightly lower than September’s 8.2% inflation rate.

Higher rates put the brakes on the economy by making it more expensive to buy a house, car or anything else on credit, though they take time to take effect. Rate hikes could bring a recession, and they tend to drag on prices for stocks and other investments.

A fourth straight month of moderating inflation from June’s 9.1% rate could afford the Federal Reserve leeway to loosen up a bit. The Fed has said that it may soon dial down the size of its increases to half a percentage point, after pushing through four straight mega increases of three-quarters of a point.

Monday’s gains for Wall Street came despite a shaky showing for its most influential stock. Apple rose 0.4% after dropping earlier in the day. It had warned customers they’ll have to wait longer to get the latest iPhones after anti-COVID restrictions were imposed on a contractor’s factory in China.

Earnings reports are also causing share prices to swing.

The reporting season for summertime profits is roughly 85% done, and S&P 500 companies are on track to deliver growth of a little more than 2%. Analysts are forecasting a drop in S&P 500 profits for the final three months of the year, of nearly 1.5%. They had been forecasting growth of 4% at the end of September.

In other trading, U.S. benchmark crude oil lost 33 cents to $91.46 per barrel in electronic trading on the New York Mercantile Exchange. It lost 82 cents to $91.79 per barrel on Monday.

Brent crude, the international pricing standard, gave up 30 cents to $97.62 per barrel.

The U.S. dollar edged up to 146.64 Japanese yen from 146.63 yen. The euro slipped to $1.0009 to $1.0016.


AP Business Writers Damian J. Troise and Stan Choe contributed.