As the U.S. presidential election approaches, financial markets are experiencing unprecedented volatility. President Biden's sudden exit from the race, with Vice President Kamala Harris stepping in as his replacement, has sparked widespread attention and discussion. In the early stages of the campaign, Harris's ability to campaign was questioned. However, as she gained broad support within her party, she quickly became a primary focus in the race. Nonetheless, doubts about her policies and leadership capabilities persist, particularly in the face of competition from Donald Trump.
Policy Differences in the Market
The outcome of the U.S. election is difficult to predict in terms of its impact on the market, especially regarding economic policies. Traditionally, Republicans tend to stimulate the economy through tax cuts, while Democrats focus more on social welfare spending and policy continuity. On tax policy, Trump plans to extend the 2017 Tax Cuts and Jobs Act and further reduce corporate tax rates, attracting some investor support. However, this policy could lead to a further increase in government debt. Harris, on the other hand, advocates increasing support for the middle class and small businesses, although her proposal to raise the corporate tax rate to 28% could put some pressure on Wall Street.
Market Uncertainty
In addition to tax and spending policies, trade and geopolitical issues are also key market concerns. Trump's high tariffs on Chinese imports and his trade protectionist policies have profound implications for global supply chains and consumer prices. In contrast, Harris's more moderate stance on these issues might yield a more stable market effect. However, no matter who wins the election, they will have to face the ever-expanding U.S. debt crisis and inflationary pressures, which could influence the Federal Reserve's policy direction.
Impact on the Stock and Commodity Markets
The stock market's reaction to the election is complex. Trump's tax cuts may boost large corporations, but the benefits for the middle class and small businesses are limited. While Harris’s policies might be favorable for the real economy, their long-term impact on the stock market remains uncertain. The gold and oil markets also face varying prospects. Trump's policies might cap the gains for gold, whereas oil prices could benefit from higher energy demand.
As the election nears, market volatility is expected to increase further. Investors are not only focused on the candidates' policy positions but are also closely monitoring global economic trends and the monetary policies of major central banks. This election will have a profound impact on the global economy in the coming years.
