Election Day Uncertainty Grips Markets
As Americans head to the polls, investors are bracing themselves for potential market volatility. The presidential race between Kamala Harris and Donald Trump remains neck-and-neck, leaving the outcome uncertain. Historically, a delayed result has led to short-term market turbulence, but ultimately, the long-term trend has prevailed.
Stock Market Reaction
US stocks opened higher on Tuesday, with the tech-heavy Nasdaq Composite leading the gains, up 0.5%. The benchmark S&P 500 rose roughly 0.3%, while the Dow Jones Industrial Average hovered just above the flatline. Investors are cautious, awaiting the election outcome, which may take days or even weeks to materialize.
Economic Implications
The candidates’ differing economic stances could inject uncertainty into the markets. A prolonged wait for a declared winner could impact the dollar and Treasury yields, which traded steadily on Tuesday. The Federal Reserve’s November policy decision, scheduled for Thursday, also hangs in the balance. Chair Jerome Powell is expected to implement a 25 basis point rate cut.
Earnings Season Continues
A slew of quarterly earnings reports is set to be released, including those from Super Micro Computer and Ferrari. Meanwhile, Boeing’s shares surged 2% after factory workers voted in favor of a new contract, ending a seven-week strike.
Betting Markets and Election Forecasters
Political betting app Kalshi puts Trump’s odds at 57%, while other betting markets suggest a 59.2% chance of a Trump win. Polling-based election models, however, project a tighter race, with Nate Silver’s Silver Bulletin model showing a nearly exact tie in electoral college probability.
Historical Context
Despite the uncertainty, historical data suggests that the stock market has ultimately prevailed, regardless of the presidential outcome. As Truist co-chief investment officer Keith Lerner notes, being an investor in stocks over time has paid dividends, regardless of the election result.
What’s Ahead
Election Day has arrived, and with it, a flurry of economic data and earnings reports. As the markets navigate the uncertainty, investors are advised to stay vigilant and focused on their long-term strategies.
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