The US presidential election 2024 is set to take place on Tuesday, November 5. There are still three months until the election, but a lot has already changed, and there is a lot of uncertainty in the air. What is going to happen, and how does the US election affect the stock market? Let’s take a look at the dramatic events surrounding this election so far.
Biden Bows Out
Likely, the biggest curveball in this election is Joe Biden’s withdrawal from the race. After the first presidential debate, reporters evaluated Biden’s performance as “poor” and “botched” by reporters. It was characterized by moments of disorientation and difficulty articulating his points. This inevitably led to widespread anxiety among Democratic strategists, elected officials, and fundraisers about Biden’s ability to lead the party to victory in the election.
Though such key figures like Kamala Harris and Gavin Newsom have defended Biden, the intensified scrutiny around the president’s health led to major doubts that he could successfully run against Donald Trump.
On Sunday, July 21, Joe Biden announced that he would be dropping out of the race and endorsed Vice President Kamala Harris as a nominee from the Democratic party. As the voting for the Democratic candidate is scheduled for August, Kamala has a strong chance of becoming the official nominee in the race against Trump.
Trump Assassination Attempt
The Republican party had a shock of their own when they almost lost their candidate, Donald Trump, to an assassination attempt. On July 13, during his campaign rally in Pennsylvania, Trump was shot and wounded; the bullet just missed his head and wounded his right ear. The injury to Trump was not serious; however, the bullet killed another spectator in the crowd. The shooter was identified as a 20-year-old registered Republican, who was killed on the spot by a Secret Service sniper. Just a few days after the incident, Trump resumed his presidential campaign and appeared at the Republican National Convention.
Some analysts suggest that the murder attempt might bring Trump sympathy votes and potentially benefit his election campaign, especially in swing states. The incident will likely contribute to Trump’s image, but it is hard to tell how much it might affect the voters’ decisions. After all, there are still three months to the election, and other major events may overshadow the impact of the assassination attempt.
What Should Traders Expect From the US Election Impact?
The election in this influential country is a major event that has the whole world watching. This year, the race is particularly heated and dramatic, with the Democratic candidate changing almost at the last minute, and Trump’s ongoing legal prosecution. So, how does the US election affect the stock market, as well as the forex market?
Historically, US presidential elections have always been the cause of increased market volatility and uncertainty. Significant price swings are not uncommon, especially following major statements from the candidates.
The US election impact will depend on the party that wins. The two sides have different, almost polar views on many major topics:
- Individual and corporate tax policies;
- Immigration issues;
- Military and defense, as well as other spending priorities;
- Geopolitical conflicts;
- Climate change;
- Healthcare policies;
- China and tariffs on imported goods, etc.
Donald Trump’s policies are largely focused on domestic affairs, so if he wins traders might see an upturn in American technology and manufacturers’ stocks, as well as American energy companies and a stronger USD. At the same time, oil and related ETFs may drop due to increased supply. Trump is also known to be in favor of cryptocurrency. At a cryptocurrency conference that he attended in July, he said that he wants to turn the United States into the “crypto capital of the planet”. While he wasn’t always such a fan of crypto, he made an effort to emphasize that he plans to ease restrictions on cryptocurrency should he win the election. This should be a major call for attention from crypto traders.
Kamala Harris, currently the most likely candidate from the Democrats, has not voiced her stand on cryptocurrency, though some analysts believe that she might take a friendlier approach to crypto than Joe Biden. As some of her policies are focused on international affairs (specifically, the Israel-Gaza conflict), as well as softening the immigration policies, it may be expected that the US dollar may weaken in the event of her victory. Kamala is known to be an advocate for climate policies, which could promote growth in renewable energy companies.*
Conclusion
There are many trading opportunities to be found during and after the election race, however, it requires keeping a close eye on the news. The US election impact is undeniable, but traders must watch the race closely to seize the opportunities when they present themselves. To understand how the US election affects the stock market, as well as other trading markets, it is important to understand the policies proposed by each candidate and trade the news timely.
*Note that the information above is an assumption only and should not be taken as investment advice.
