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What is the worst possible outcome for the markets on election day? Analysts’ verdicts
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What is the worst possible outcome for the markets on election day? Analysts’ verdicts

There is very little to share Donald Trump and Kamala Harris in the polls as voters head to their 2024 presidential ballot — and uncertainty weighs on the minds of financial market investors.

Not to mention the races that will determine party control Senate and the House, and so how simple the policy is to give his platform to whoever enters the White House in January 2025: Trump Republican or Harris the Democrat.

As an idea begins to emerge about who won the day and how much friction in Congress they face, the markets will respond, giving their verdict on the future path of the US economy by shaping the prices and interest rates of stocks, bonds and the like.

It could be some time, however, before the final outcome is known — perhaps even days and weeks, depending on how close the results are and thus how many counts are tied up in the political and legal wrangling that drags out the process.

So, from a market perspective, what is the worst possible outcome of US Election Day? Newsweek ask the experts.

Here’s what they said.

Kamala Harris Donald Trump close up
Democratic presidential nominee Kamala Harris, left, speaks to supporters during a campaign event on Nov. 1, 2024 in Little Chute, Wis. That’s right, Republican presidential candidate Donald Trump speaks at a campaign rally in Milwaukee, Wisconsin,…


Scott Olson/Getty Images/KAMIL KRZACZYNSKI/AFP

Eric Wallerstein, Chief Market Strategist, Yardeni Research

The worst possible outcome is contested elections. Political stability underpins demand for US assets. A contested election that prevents a winner from being named for an extended period would hurt stocks, increase volatility and cause a gold rush.

Richard Bernstein, CEO and Chief Investment Officer, Richard Bernstein Advisors LLC

The best outcome would be a peaceful and orderly transition of power. The worst outcome would be the opposite.

Second, I would suggest that a sweep of either party (President/Senate/House) would not be well received by the financial markets as it could lead to unbridled spending and/or tax cuts at a time when fiscal responsibility it is extremely necessary.

Bonus: The S&P 500 had exactly the same total return under Obama and Trump (16.3%/year, based on inauguration data) despite their massive policy differences. Presidents really don’t matter to the market.

Peter Berezin, Chief Strategist, BCA Research

A democratic review would be very negative for stocks, as it would significantly increase the chances of higher taxes on profits and capital gains.

A Trump victory accompanied by Democratic control of the House could also be viewed negatively as it would open the way to higher tariffs without countervailing tax cuts.

Paul Ashworth, Chief Economist North America, Capital Economics

The worst outcome for the bond market: A clean sweep on both sides that opens the door to more debt-financed stimulus.

Worst outcome for stocks: Likely a Democratic review or contested outcome.

Worst outcome for the dollar: Likely a Harris win or a contested result.

Worst outcome for the economy: a Trump win.