A trader works on the trading floor of the New York Stock Exchange on August 4, 2022.
Source: New York Stock Exchange
Stocks were quiet in early trading Tuesday night as investors braced for a long night ahead of a contentious U.S. presidential race that will have major ramifications for markets and the economy.
Futures on Dow Jones Industrial Average An increase of 41 points. S&P 500 Index Futures The increase is less than 0.1% and Nasdaq 100 Futures It’s flat.
Americans are voting across the country in the tight race between former President Donald Trump and Vice President Kamala Harris. The first polling places in parts of Kentucky and Indiana will close at 6 p.m. ET on Tuesday. Follow CNBC’s 2024 election live blog here.
Trump’s tax-cut agenda could provide a real boost to U.S. businesses, but his presidency’s high tariffs and potential global trade wars could lead to more uncertainty and a resurgence of inflation. The risk of tighter regulation in a Harris administration could bring more scrutiny to industries like banking and health care, while Democratic support for clean energy could boost electric vehicle companies and solar companies.
Investors are also keeping a close eye on whether the partisan composition of the two chambers of Congress remains divided. A Republican or Democratic sweep could lead to more dramatic spending changes or a sharp overhaul of tax policy.
Goldman Sachs predicts that a Trump victory and a Republican sweep of Congress will trigger a 3% rise in the S&P 500 Index. On the other hand, the bank told its clients that a Harris win with a divided Congress would cause the S&P 500 to fall 1.5%.
“I very much agree with the view that a Trump victory would be very good for stocks,” Strategas Chairman Jason Trennert said on CNBC’s “Power Lunch” on Tuesday. “And I think a Harris victory would be very good for risk assets. Not particularly advantageous.”
But traders may have to wait until later this week for the election results to be known. Prolonged uncertainty is likely to weigh on markets ahead of the results.
Stocks rallied across the board on Tuesday ahead of the election results, with the S&P 500 rising 1.2%, taking the benchmark’s 2024 gain to more than 21%. The blue-chip Dow Jones Industrial Average rose more than 400 points.
After the election, there will be another market-affecting event this week in the latest interest rate decision announced by the Federal Reserve on Thursday. Traders reportedly see a 99% chance of a 25 basis point rate cut, following a half-percentage point cut in September CME Group’s FedWatch Tool.
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