Impact of the Upcoming US Election on Equity Markets

Investing.com — The upcoming US election may not significantly impact the overall equity market, according to a recent survey by RBC Capital Markets.

Survey Insights

The RBC team noted that while the election is relevant to the US equity markets, it may hold less importance than some market participants believe. The survey, conducted from September 11 to September 20, polled 116 analysts across various sectors.

Sector Relevance

For most sectors, the election’s importance is neutral to slightly positive, especially in comparison to broader economic factors. A Republican sweep—especially if led by former President Trump—is viewed as modestly bullish. Sectors like Energy and Financials are expected to benefit the most under this scenario.

Conversely, a Democratic sweep, led by Vice President Harris, presents a more bearish outlook; however, these views remain mild. The sectors ranking highest in relevance include Industrials, Financials, and Utilities, while sectors like Consumer Discretionary and Information Technology show neutral to mixed perspectives.

Global Perspective

Outside the US, the election’s impact seems even more subdued. Analysts from regions such as Australia and Europe express limited concern over the outcomes. Among all surveyed regions, 51% deemed the event relevant (44% relevant, 7% very relevant). Interestingly, the relevancy score for the US was only 0.7, indicating mild significance.

Market Volatility and Concerns

RBC notes that uncertainty regarding the election may trigger short-term market volatility. A Trump win could provide a short-term boost for stocks, while a Democratic sweep might negatively affect the market temporarily. Despite these potential impacts, the main concern remains getting past the election so that companies and investors can understand the future landscape.