Coronavirus - we're here to help
From how to access your account online, scam awareness, your wellbeing and our community we're here to help.

Skip to main content
  • Register
  • Help
  • Contact us
  • Log in to HL Account

US election – stock market reaction and political update

How to navigate any stock market volatility.

Important notes

This article isn’t personal advice. If you’re not sure whether an investment is right for you please seek advice. If you choose to invest the value of your investment will rise and fall, so you could get back less than you put in.

With the US election well underway the short-term outlook is simple. Uncertainty.

It’s unlikely we’ll see a result today, and we might be waiting until Friday.

There’s also a growing likelihood of a legal fight lasting several weeks to decide who is formally elected President.

Market reaction

Susannah Streeter, Senior Investment and Markets Analyst

“With Donald Trump already claiming victory even though millions of votes are still uncounted, investors may have to belt up and brace themselves for some volatile sessions of trading ahead.

So far, as trading has got underway in Europe, investors seem to be adopting a wait and see approach. It is likely to be many hours and possibly days before all states tally all the ballots.

US equity futures have already been swinging. With uncertainty the name of the game there are signs some investors are ploughing into perceived safe haven bonds, with yields on US treasuries falling back.”

Political update

George Trefgarne

“Donald Trump has done better than the pollsters predicted, taking Florida and Texas.

It is likely the Republicans will retain the Senate and although make progress on the House of Representatives, still be behind the Democrats there.

However, judging by their speeches to supporters earlier, both Trump and Biden are claiming victory. Trump’s claim rests on being ahead in votes physically cast in ballot boxes on the day in the critical states like Pennsylvania, and Biden’s on being ahead once Mail-In votes are counted in coming days.

Each state has varying rules, but it is clear the Republicans will take this to the Supreme Court arguing, for instance, that votes in Pennsylvania received after polling day – but apparently posted before – should be discounted. This is what Trump means when he claims people are still voting. It is not true, but it does have a kernel of truth he has exaggerated.

Under the Constitution, a President must be sworn in on 20 January 2021. That is the hard stop date.

Under the Electoral Count Act, 14 December this year is the date by which Electoral College votes must be announced at a state level.”

George Trefgarne is CEO of Boscobel & Partners, a political consultancy.

Hargreaves Lansdown may not share the views of the author.

What it means for investors

Matthew Taylor, Research Editor

“While we can make guesses about who'll win an election, and then more guesses about how the stock market will react, that's not normally a good idea. Not being invested in the US would have hurt investors’ performance in the past, but that doesn't mean investors should overdo it and have too much invested here moving forward.

Having a balance is always a good idea, especially in uncertain times. Please remember all investments will rise and fall in value, so there’s always a chance you could get back less than you put in.

Investors should also consider their own time horizons, making sure they have a well-diversified portfolio. That means no matter who gets into the White House, or which industries flourish, you could stand to benefit in the long run.”

This is not personal advice. If you are unsure, please seek advice.

Editor’s choice: our weekly email

Sign up to receive the week’s top investment stories from Hargreaves Lansdown

Please correct the following errors before you continue:

    Existing client? Please log in to your account to automatically fill in the details below.


    Your postcode ends:

    Not your postcode? Enter your full address.


    Hargreaves Lansdown PLC group companies will usually send you further information by post and/or email about our products and services. If you would prefer not to receive this, please do let us know. We will not sell or trade your personal data.

    What did you think of this article?

    Important notes

    This article isn’t personal advice. If you’re not sure whether an investment is right for you please seek advice. If you choose to invest the value of your investment will rise and fall, so you could get back less than you put in.

    Editor's choice – our weekly email

    Sign up to receive the week's top investment stories from Hargreaves Lansdown. Including:

    • Latest comment on economies and markets
    • Expert investment research
    • Financial planning tips
    Sign up

    Related articles

    Category: Investing and saving

    UK Budget 2021 – what investors need to know

    Expert views on the key takeaways from yesterday's 2021 Budget and what it could mean for your finances and investments.

    Matthew Taylor

    04 Mar 2021 7 min read

    Category: Investing and saving

    A financial adviser’s guide to tax allowances

    HL Financial Adviser, Bradley Clark, shares his top tips on taking advantage of your tax allowances before the tax year end on 5 April.

    Bradley Clark

    03 Mar 2021 6 min read

    Category: Shares

    FTSE 100 – the 5 highest ESG rated companies

    A look at 5 of the most environmentally and socially responsible companies in the FTSE 100 and what this means for investors

    Sophie Lund-Yates

    03 Mar 2021 8 min read

    Category: Investing and saving

    SIPP vs ISA

    How to invest tax-efficiently.

    Isabel McDougall

    02 Mar 2021 4 min read