US Presidential Elections 2024: How would stock market react?

US Presidential Elections 2024: How would stock market react?

The US presidential election is a major event being observed, and the equities markets are still erratic. Regardless of whether Kamala Harris or Donald Trump prevails, analysts discuss their predictions for the market’s performance as investors observe and evaluate possible market reactions and the likely victor.

The dynamics of the budget deficit are drawing more attention from investors, according to Alex Kuptsikevich, Chief Market Analyst at FxPro.

“A couple of years ago, markets chastised the UK for announcing ‘unfunded’ tax cuts. The same could be happening in the US. We do not rule out the possibility that the persistent fall in bond prices (rising yields) and the pull on the dollar and gold since September are a manifestation of concern about this issue,” said Kuptsikevich. The candidates are avoiding this uncomfortable topic but will surely return to it immediately after the victory speech, he further said, adding that there is potential for volatility in the first few days after the election.

He noted that after a period of sluggishness in the weeks preceding an election, stock indices typically rise shortly after the election. Kuptsikevich added, “It’s important to remember that in past elections, equity indices have corrected more deeply and accelerated higher than we’ve seen now.”

“A repeat of all-time highs is likely, but it’s hardly reasonable to expect 10% or 15% gains for the rest of the year after election day, as we saw in 2016 and 2020, or even 7%, as was the case in 2012,” said Kuptsikevich.

Chokkalingam G, Founder of Equinomics Research Pvt Ltd, does not anticipate a major shift in the India-US relationship concerning the direct impact on India. According to Chokkalingam, the US cannot afford to have antagonistic relations with both China and India at the same time, therefore the elections might not have a direct effect on India.

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