As the US election results roll in, highly caffeinated traders and investors will be glued to their screens, making rapid adjustments and watching the markets swing through the night. With stakes high and outcomes uncertain, Wall Street’s top firms are preparing for an unpredictable night that could reshape policy and rattle global markets.
Key trading desks across Europe, Asia, and the US will be staffed through the night, with backup from offices in Hong Kong and Singapore. JPMorgan Chase & Co. has already planned increased staffing, while Goldman Sachs expects hundreds from its sales and trading teams to work late into the night. Teams are bracing for volatility, especially as the election could dramatically shift the direction of the US economy. The close race between Kamala Harris and Donald Trump has traders betting on significant market movements, including fluctuations in the dollar, crypto, and bonds.
While traders are preparing for typical election-night swings, this year presents unique challenges. One London-based hedge fund has even primed its “shock model” for the possibility of unexpected events. Some institutions are also preparing for remote risks, such as civic unrest, which could further destabilize markets.
Market predictions currently favor Trump, with stocks rising alongside the dollar and bond yields. However, if Harris pulls off a victory, traders expect a rapid reversal of popular “Trump trades.” These include long-dollar and short-bond positions, which could see significant volatility overnight. As a result, many investors are putting hedges in place to protect against potential post-election shocks.
Swing state results will play a crucial role, with early numbers from Michigan potentially giving clues about outcomes in Pennsylvania and Wisconsin. Yet, there’s a growing concern that delays or contested results could lead to prolonged uncertainty. Some traders remember the market chaos of 2016 when Trump’s unexpected win sent US futures crashing before they recovered. This year’s race could see even more volatility, with the Federal Reserve’s next interest rate decision coming just two days after the polls close.
Beyond the presidency, the balance of power in Congress could significantly impact markets. If Republicans win both the House and Senate, some expect higher inflation and a steeper decline in bond markets. However, a divided legislature is seen as stabilizing, as it would limit the scope for sweeping policy changes.
Investors are gearing up for a long night, with many already fueling up on caffeine and snacks. For some, the election is not just a chance to make trades but also an opportunity to gain a deeper understanding of how markets respond to major political events. As Fulcrum Asset Management’s Suhail Shaikh put it, “Even if you don’t trade during this time, you learn a lot about markets living through these events.”
With global markets on edge and the potential for prolonged uncertainty, November 5th promises to be a night of high-stakes trading — and sleepless anticipation.
