The 2024 U.S. presidential race is neck and neck between Kamala Harris and Donald Trump, and as usual, it’s not just voters feeling the tension—markets are all eyes and ears on the outcome too.
Our research desk has zeroed in on the numbers, market vibes, and current trends to see what might come next.
Believe it or not, the S&P 500 has a surprising track record in predicting election winners.
Data from LPL Financial Holdings shows that when the S&P gains in the three months before Election Day, the incumbent party has won 83% of the time.
Right now, the index has gained 11.8% since August, hinting at a possible edge for Harris.
But 2020 broke the mould: Biden won despite a strong S&P showing, likely due to pandemic chaos. And Wall Street’s sentiment this time?
A bit split, with a tilt toward Trump.
Market participants are bracing for potentially higher inflation and tariffs with a Trump win, and we see this reflected in the bond market, where prices are down, yields are up, and concerns over Trump’s potential policies are growing.
The USDX (U.S. Dollar Index) recently attempted a dip but didn’t quite reach the 103.40 support level, bouncing back after testing 103.775. This recovery hints at renewed buying interest, which could push the index towards 104.535.
If USDX breaks above 104.535, buyers may aim for 104.65. However, this level could act as a resistance point where bearish action might come into play. Traders may watch for signs of price reversal around 104.65, as it could signal a short-term pullback opportunity.
Over in the political betting markets, Trump has been gaining traction, partly due to his focus on manufacturing and inflation control—two big issues for a hefty chunk of voters.
On the polling front, Harris has a slight edge with 48.1% over Trump’s 46.4%, according to ABC News’ 538 tracker. But with 62% of Americans feeling the economic pinch, Harris’s edge might be fragile.
With Biden stepping out of the race, Harris has a shot at pivoting her platform away from current economic challenges.
The SP500 may continue consolidating before an upward move. Traders could find bullish signals around 5750 or 5710 if the index declines. If it rises, 6050 is the resistance to monitor.
Across the pond, European markets aren’t exactly thrilled at the thought of a Trump win. His trade stance could ruffle EU-U.S. trade relations, and that potential is enough to keep European markets on edge.
If Trump comes out on top, we could see global trade shifts ripple across sectors, especially for Europe.
The EURUSD pair recently made a move up from 1.0760, but it ran out of steam before reaching 1.0850. This pause hints that buyers aren’t quite ready to push through, setting the stage for a possible pullback.
With this in mind, EURUSD could dip further to around 1.0720, which may act as a key support level.
For those looking to go long, 1.0720 could be a good spot to watch for any bullish signals—a bounce here might be just the ticket for a potential recovery move.
It’s a big week for market-watchers, with data drops and central bank updates that could shake things up:
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