Over 75 million Americans have already cast their ballots to decide their Commander-in-Chief for the next four years. The 2024 election campaign, estimated to have cost over $15 billion—making it the most expensive U.S. election in history—is also one of the fiercest and most closely contested elections in recent memory. VP Harris and former President Trump are separated by just 1.2% (in Trump's favor) in the national polling averages, with the election coming down to seven key swing states: Arizona, Georgia, Michigan, Nevada, North Carolina, Pennsylvania, and Wisconsin, where neither candidate has had a lead greater than 2 percentage points this election cycle.
Volatility is expected across all major market segments as the world’s most powerful nation casts its vote. There is already heightened market volatility, with this election expected to be on a knife edge, and experts warning that these conditions could last longer than in previous elections if the results are challenged. Markets have been pricing in a Trump victory in recent weeks, as his two key economic mandates—a more aggressive stance on tariffs and increased fiscal deficits—could theoretically force the Fed to hike interest rates again to counteract inflationary pressures. As a result, Treasuries sharply slid, and the Greenback has been making a fresh charge, with the potential for rate hikes if former President Trump returns to the Oval Office seeming unavoidable. The Dollar Index, taking its cues from U.S. election betting markets—where Trump had a significant double-digit percentage point lead over Harris—hit a three-month high of 104.55 last week.
While the VIX has been trending higher and historically the S&P 500 tends to underperform in an election year, the recent tech-focused drive in the equity markets suggests there is potential for this trend to be broken. Additionally, with Trump being seen as more crypto-friendly and his lead in some polls, Bitcoin has been less than $200 away from testing its all-time high, with the largest cryptocurrency soaring to $73,577 last week.
Over the weekend, Kamala Harris and the Democrats have been clawing away at the gap in the betting markets, with Trump losing a 9% lead over VP Harris to now sit at 54.3%. As a result, some degree of reversal has begun to be seen across an array of markets. The variance between candidates' standings and the uncertainty will no doubt heighten over the coming days.
Polls will close at 9 p.m. ET at the latest in the key swing states. As in 2020, with the influx of mail-in voters, the election results may take hours or potentially days to count and verify who will become the 47th President of the United States. In 2020, the election results were called four days after polls closed.
