Market Attention Shifts to the US Presidential Debate Between Trump and Harris

Market Attention Shifts to the US Presidential Debate Between Trump and Harris

With both candidates running a tight race, the outcome of this debate could significantly influence election odds and, in turn, market movements. In past elections, it wasn’t always the specific policies that affected investor sentiment, but more often the broader perceptions of candidates' leadership qualities. Factors such as age, experience, and overall demeanour have been known to shape public opinion, which can ripple through the markets.

From a policy perspective, several key areas are likely to capture market attention during the debate. Trump’s trade stance, especially regarding potential tariffs, is expected to be a major point of discussion. Investors are keen to hear if he will push for the imposition of tariffs ranging from 10% to 60%, particularly on imports from China.

Tax policy will also play a critical role, especially concerning the fiscal deficit. Markets will closely scrutinize both candidates' plans for taxation, which will directly affect federal spending and economic growth trajectories.

Additionally, the candidates' views on the US dollar and the Federal Reserve's independence could sway currency and interest rate expectations. A victory for Trump and a Republican-controlled Congress may result in a stronger dollar, though the situation today is different from 2017, given the Federal Reserve's current approach to monetary policy.

Beyond the debate, recent macroeconomic data has suggested some weakening in consumer confidence. The NFIB small business sentiment index has declined, and reports from the banking and automotive sectors indicate an uncertain outlook for 2025. Meanwhile, today's US inflation report will be another key factor to watch, as the potential rise in used car prices may be tempered by slower inflation in services.

This content may have been written by a third party. ACY makes no representation or warranty and assumes no liability as to the accuracy or completeness of the information provided, nor any loss arising from any investment based on a recommendation, forecast or other information supplies by any third-party. This content is information only, and does not constitute financial, investment or other advice on which you can rely.