Major stock markets rose and the dollar remained under pressure Tuesday as the United States votes in a knife-edge presidential election.
Equities in Shanghai and Hong Kong won strong support from hopes over China’s economy, while European indices grew slightly as investors await interest-rate decisions from the US Federal Reserve and Bank of England on Thursday.
“A contested election result could cause volatility on the markets,” noted Russ Mould, investment director at AJ Bell.
“Equally, a clear winner quickly after voting ends could provide some relief to investors.”
A win for Republican Donald Trump is expected to boost the dollar, restoke inflation, and send Treasury yields higher owing to his pledges to slash taxes and impose tariffs on imports.
Analysts see less upheaval from a win by Democratic Vice President Kamala Harris.
“A pro-tariff Trump presidency could see the dollar strengthen amid concerns higher inflation will prompt the Fed to keep interest rates higher,” predicted Matt Britzman, senior equity analyst at Hargreaves Lansdown.
“There is likely to a period of volatility particularly if the result is contested, but investors should keep their eyes on long-term horizons as historically financial markets have risen over the course of both Democratic and Republican presidencies.”
