FX.co ★ 4 potential US presidential election outcomes

Scenario No. 1: Trump’s victory

Many experts believe that this scenario is unlikely to unfold. The current US president has little chances to be re-elected. Donald Trump’s victory will not have any impact on the market. The majority of trading instruments will not react to such an outcome.

Scenario No. 2: controversial election results

This scenario is fraught with pitfalls. Thus, controversial election results are likely to lead to an escalation of tensions in the US government and even provoke civil strife. These events are likely to take place if both candidates receive an almost equal number of votes. Consequently, both candidates will be able to challenge the election results. Anyway, this scenario may cause turmoil in the market, increasing the current uncertainty.

Scenario No. 3: Biden wins but loses majority of votes in Congress

This scenario looks contradictory and even slightly improbable. The majority of analysts believe that Joe Biden’s election victory will guarantee him the majority of votes in the Congress. However, this is not always the case. If this scenario is played out, it will be beneficial to the market as the new president's actions will be constrained by other political forces.

Scenario No. 4: Biden wins both election and majority of votes in Congress

This is the most probable outcome according to experts. If Joe Biden becomes the next US president and has the majority of votes in the Congress, it will likely trigger market jitters. With the dominance of the Democrats, the new fiscal stimulus package will be quickly approved, followed by an increase in taxes. Sberbank CIB experts consider it to be the worst-case scenario for the market.