Investors React to Fiery Presidential Debate Between Trump and Harris

U.S. stock futures dipped and the dollar weakened during early Asian trading on Wednesday, following the first face-off between Republican candidate Donald Trump and Democratic Vice President Kamala Harris. Analysts indicated that Harris appeared to outperform Trump slightly in the debate.

In a recent prediction market for the 2024 presidential election, Harris’ odds improved from 52% to 56%, while Trump’s prospects declined from 51% to 48% just before the debate.

Stock futures experienced a decline during and after the debate, with E-minis down 0.5% and 0.65%. The dollar index, which gauges the currency’s strength against six major counterparts, fell by 0.23%.

Analyst Comments:

Quincy Crosby, Chief Global Strategist for LPL Financial:
“It was light on specifics from both candidates. Supporters of Trump will likely assert he won, while Democratic loyalists will feel Harris emerged victorious. The real question is the impact on independents and undecided voters, who may struggle to form an opinion from such a general debate. If a calm demeanor is seen as favorable for a presidential temperament, market reactions may reflect this, either gravitating towards the known from Trump versus the policies presented by Harris. Otherwise, it may lead us back to where we were before the debate.”

Eric Beyrich, Portfolio Manager at Sound Income Strategies:
“Neither candidate presented clear economic strategies. However, Harris seemed to perform better than Trump. There was a notable lack of reassurance from both sides, potentially introducing more uncertainty into the markets. Investors prefer clarity, and neither candidate provided much comfort on economic policies, with Harris appearing more left-leaning than previously indicated.”

Shier Lee Lim, Lead FX & Macro Strategist for APAC at Convera:
“The debate hasn’t significantly impacted markets thus far, aligning with low volatility expectations leading into the event. Betting markets still suggest Trump holds a narrow edge in the overall election, although the race remains competitive.”

Brian Nick, Head of Portfolio Strategy at NewEdge Wealth:
"The debate didn’t cover substantial issues relevant to investors, particularly taxes. Questions remain about Trump’s stance on the Federal Reserve’s independence. Overall, there wasn’t much substance to drive market movement, which isn’t surprising given the lack of significant reactions.”

Sonu Varghese, Global Macro Strategist at Carson Group:
“The debate likely won’t sway many voters, given the close divide. Even with Harris’ rise in prediction markets, the race remains tight. Little policy substance was discussed, and the outcome will depend more on Congress’s composition regarding economic policies next year.”

Gregory Faranello, Head of U.S. Rates at Amerivet Securities:
“Harris performed well, but the debate didn’t provide any new insights, with no decisive victories. Polls in the coming days will give more clues, but the election is expected to be very tight, with short-term market focus likely on monetary policy.”

Steve Sosnick, Chief Market Strategist at Interactive Brokers:
“The debate remained fairly generic, lacking specific details on crucial topics. With such a narrow margin in the race, markets are uncertain about the campaign’s direction. It seems Harris may be slightly ahead, but it’s unclear if her performance has resonated with those who need to be convinced.”

Vasu Menon, Managing Director of Investment Strategy at OCBC Singapore:
“Today’s debate won’t shift the dynamics significantly. There were no clear winners, and the economy’s performance in the coming weeks will ultimately influence voter behavior leading up to the November elections.”

Rob Carnell, ING’s Regional Head of Research for Asia-Pacific:
“Markets aren’t reacting strongly, indicating a lack of economic specifics from the debate. Harris appeared to navigate her responses well against Trump.”

Jack Ablin, Chief Investment Officer at Cresset Capital:
“This debate reinforces the expectation of a close election. The discourse has covered the relevant issues adequately, but perceptions about individual well-being will ultimately shape voting behavior in November.”

Karl Schamotta, Chief Market Strategist at Corpay:
“The dollar is slightly weaker as Harris gains marginally in prediction markets. Currencies that might be affected in a trade war, such as the Mexican peso and Canadian dollar, are showing some gains amidst low trading volumes.”

Overall, the debate seemed to maintain existing market trends without establishing a significant shift in sentiment, leaving investors and analysts keen to see how the campaign develops as Election Day approaches.