First and foremost, prediction market traders are betting to make money, not showing loyalty to any politician. Their goal is profit, and they're trying to secure bets at favorable odds based on who they think will win. Several factors, like strong GOP voter registration data in swing states like Pennsylvania, indicate that Trump has a solid chance of winning this election.
What might change if Trump becomes president?
Analysts quickly highlight Trump’s plan to impose tariffs on imports, a move economists widely believe would raise consumer prices, bring back inflation, and push interest rates higher.
Trump has also pledged to extend the corporate tax cuts from his first term, which are set to phase out in 2025. If Congress approves and he signs the cuts into law, they would likely be paired with a deregulatory push by federal agencies.
This combination of lower corporate tax and loose regulation would likely boost corporate profits and drive the stock market upward. Trump’s policies are expected to benefit sectors like oil, gas, and artificial intelligence. At the same time, companies focused on renewable energy could suffer if Trump rolled back the incentives that had been put in place under Biden.
Trump Media & Technology Group, the parent company of the social media platform Truth Social, could see a rise in value if Trump wins. Truth Social stock price has more than doubled over the past month as Trump's standing in some polls has improved.
However, while Trump’s policies could boost the stock market, they might also pose risks.
On the campaign trail, besides tariffs, Trump has also expressed plans to deport millions of undocumented immigrants, which some economists argue could lead to a labor shortage.
Forex traders also position their portfolios to reflect Trump's economic policies, benefiting the US dollar. As the November 5 election date approaches, increased volatility for the dollar is expected.
The US dollar index recently surged to above 104.30, a three-month high, marking its 15th day of gains in the last 17 sessions.
There have been many factors supporting the dollar’s rise lately, including the prospect of a gradual reduction in Federal Reserve interest rates and a strong US economy.
