Market Volatility Ahead of US Presidential Election

Investing.com — Markets are on edge ahead of the upcoming US presidential election on Tuesday. Analysts suggest the outcome could significantly impact market performance, particularly in the Big Tech sector.

According to Wedbush analysts, a potential Trump victory raises concerns among global tech investors due to the possible escalation of the US-China tech conflict and increased tariffs.

> “A major change in tariffs and a harsher stance on China would significantly impact the supply chain, Nvidia (NASDAQ: NVDA), and likely trigger Beijing's retaliatory impacts on Apple/Tesla, consequently slowing the pace of the AI Revolution,” said analysts led by Dan Ives in a note.

Additionally, the position of Lina Khan as Chair of the Federal Trade Commission (FTC) is pivotal for Big Tech. Her role may conclude under a Harris administration, but is likely to continue if Trump remains in power.

> “From a Big Tech/AI trade perspective, we view a Harris White House win as more bullish on the margins and a Trump win as a net negative for Big Tech,” analysts added.

However, the possibility of political gridlock with mixed Senate and House outcomes could stall significant policy shifts affecting Big Tech in the short term.

Reflecting on last week's significant earnings reports, Wedbush's team stated that the strong performance of companies such as Microsoft (NASDAQ: MSFT), Alphabet (NASDAQ: GOOGL), and Amazon (NASDAQ: AMZN) reinforces its bullish stance on the sector.

These firms showcased that “the accelerated cloud shift and foundation for the AI Revolution is just starting to get built out for the coming years,” analysts remarked.

Despite some initial negative reactions, including to Microsoft’s report, they believe the market will interpret these outcomes as positive indicators for the tech industry's growth trajectory leading up to 2025.