As the 2024 U.S. presidential election reaches its peak, Wall Street is seeing a notable rally, while the U.S. dollar slips as investors brace for a potential game-changing outcome. With the race narrowing down to former President donald trump and Vice President Kamala harris, markets are reacting to the shifting political landscape.

Wall Street Gets a Boost

The stock market saw modest gains on election Day, with major indices edging higher. Investors appear to be cautiously optimistic amid the uncertainty, betting on a stable economic outlook regardless of who claims victory. The Dow Jones Industrial Average rose 0.5%, while the S&P 500 added 0.4%, and the tech-heavy NASDAQ gained 0.3%.

Despite the volatility that typically accompanies election seasons, particularly one as contentious as this, analysts believe that a continuation of current policies—whether under trump or Harris—could provide a sense of predictability for Wall Street. Trump's pro-business stance and deregulation policies remain popular with certain sectors, while Harris’s commitment to climate change action, healthcare reform, and income redistribution resonates with others.

The Dollar Falls

Meanwhile, the U.S. dollar has taken a dip, dropping by about 0.2% against a basket of major currencies. While the dollar traditionally strengthens during periods of political certainty, the potential for a divided government or contentious post-election period seems to have spooked foreign investors. The dollar’s decline could indicate broader concerns about the country’s fiscal future, especially if the election results lead to uncertainty over key policy areas like taxation and government spending.

Currency analysts are watching closely to see if this dip in the dollar will continue as more states report their results. A close race between trump and harris could drag out the counting process, exacerbating concerns about political gridlock and slowing the economic recovery from the pandemic.

Key Battleground States

As votes are being counted, key battleground states like Pennsylvania, Michigan, Wisconsin, and Arizona are proving to be decisive. Both trump and harris are making last-minute appeals to voters in these crucial regions. In Pennsylvania, for example, Trump’s stronghold in rural areas is being challenged by Harris’s increasing popularity in urban centers like Philadelphia and Pittsburgh.

In Michigan and Wisconsin, where the 2020 election was decided by razor-thin margins, the campaigns have been pulling out all the stops. With early voting turning out in high numbers, both candidates are hoping that they can sway the final few undecided voters to their side.

Looking Ahead: A Tight Race

With exit polls showing a near-even split between trump and harris, the country is bracing for a potentially drawn-out count. Early projections indicate that the final result may not be clear on election Night, as mail-in ballots and absentee voting continue to flood in. Both candidates have made public calls for patience and a thorough count of every vote.

Analysts are preparing for the possibility of a contested result, particularly if the outcome hinges on a narrow margin in swing states. Legal challenges and recounts could stretch the process into weeks, as both parties have indicated they will fight for every vote.