By Stephen Culp

NEW YORK (Reuters) -U.S. stocks advanced on Tuesday, gaining momentum in morning trading while Treasury yields took a pause as Americans went to the polls and market participants bided their time to determine whether Capitol Hill is in for a power shift.

The blue-chip Dow led Wall Street’s major slightly higher, while the greenback was essentially unchanged against a basket of world currencies.

The result of the U.S. midterm election will decide whether Democrats lose or retain congressional control halfway through President Joe Biden’s first term in the oval office, raising the possibility of legislative gridlock.

“There’s a lot of talk of a Republican take-over and in the mind of investors that translates to a better business environment, a more business friendly congress,” said Robert Pavlik, senior portfolio manager at Dakota Wealth in Fairfield, Connecticut. “A Republican-controlled congress could create gridlock, and that would be viewed as an overall positive because regulation could be less likely to pass.”

Inflation remains a top concern among voters and the Federal Reserve, and market participants – with third quarter reporting season now largely in the books – are also awaiting crucial consumer price data on Thursday.

The Dow Jones Industrial Average rose 402.76 points, or 1.23%, to 33,229.76, the S&P 500 gained 31.48 points, or 0.83%, to 3,838.28 and the Nasdaq Composite added 73.71 points, or 0.7%, to 10,638.23.

European stocks gained ground, following their U.S. counterparts higher as investors watched election day get underway in the United States.

The pan-European STOXX 600 index rose 0.73% and MSCI’s gauge of stocks across the globe gained 0.94%.

Emerging market stocks rose 0.48%. MSCI’s broadest index of Asia-Pacific shares outside Japan closed 0.77% higher, while Japan’s Nikkei rose 1.25%.

Treasury yields drifted lower, held in check ahead of midterm election results and upcoming inflation data

Benchmark 10-year notes last rose 16/32 in price to yield 4.1486%, from 4.214% late on Monday.

The 30-year bond last rose 20/32 in price to yield 4.2694%, from 4.313% late on Monday.

The greenback lost ground against a basket of world currencies as rising investor sentiment weighed on the safe-haven currency.

The dollar index fell 0.37%, with the euro up 0.5% to $1.0069.

The Japanese yen strengthened 0.81% versus the greenback at 145.47 per dollar, while Sterling was last trading at $1.1555, up 0.38% on the day.

Crude prices dipped amid recession jitters and worsening COVID-19 outbreaks in China, raising concerns over softening demand.

U.S. crude fell 0.48% to $91.35 per barrel and Brent was last at $97.86, down 0.06% on the day.

Gold gained ground, moving in opposition to the dollar.

Spot gold added 2.0% to $1,707.41 an ounce.

(Reporting by Stephen Culp, Editing by Angus MacSwan)