US Presidential Election: A Challenge for Wall Street Stocks
Investing.com — The US presidential election poses a significant challenge to Wall Street stocks, as analyzed by experts at RBC Capital Markets.
In a recent note to clients, analysts highlighted that the November election has injected uncertainty into equity forecasts, which several companies mentioned during their earnings calls.
Historically, the S&P 500 index tends to see a pullback during September and October in election years, followed by a rebound. This trend appears to be ongoing, as September has already witnessed the worst weekly performance for US stocks in over a year amid soft economic data and cautious comments from Federal Reserve officials.
Furthermore, markets are also weighing the candidates’ domestic tax policies. Democrat Kamala Harris proposes raising the corporate tax rate from 21% to 28% to ensure corporations pay their fair share, which RBC analysts estimate could reduce S&P 500 earnings by over 8%. In contrast, Republican Donald Trump aims to lower the corporate tax rate to 15%, potentially boosting returns by more than 7%, though his approach to limiting this benefit to companies manufacturing in America raises uncertainty.
An impending debate between Harris and Trump could shed light on their domestic policies, providing investors with valuable insights. Meanwhile, a national poll indicates a close race, with Trump leading Harris 48% to 47%, reflecting a highly uncertain outcome for the November 5 election.
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