Markets Brace for Volatility Ahead of High-Stakes Election With Diverging Policy Implications
• A Republican sweep would likely be most positive for stock markets due to potential tax cuts and reduced regulation. However, Trump's trade policies could temper gains.
• A Biden win coupled with a split Congress would have a muted impact, as major policy changes would be difficult to enact.
• A Democratic sweep raises chances of tax hikes and more regulation, which could drag on equities.
• If Trump wins but Congress splits, markets would see fewer tailwinds than a full Republican sweep, though regulation would still be looser than under Biden.
• Regardless of electoral outcome, volatility is expected to increase leading up to November's election due to stark policy differences between candidates.