Presidential Debate: Stocks set to suffer on Trump's refusal to accept the results

  • President Trump and rival Biden clashed in a chaotic shouting match.
  • Biden's initial lack of sharpness may boost tighten the elections.
  • Trump's refusal to accept the result and embrace of white supremacists increase the chance of violence.

70% annoyed, 30% entertained – that is one of the results in instant polls following the first presidential debate. Media outlets may have different ways of covering the debate, yet the word "chaos" has been repeated in many of them. 

President Donald Trump kicked off the debate by bulldozing challenger Joe Biden in a range of attacks, some deeply personal. At first, the Democrat was not sharp enough and responded with insults of his own.

People often remember the beginning and the end of any experience, and if this holds here, Trump may have succeeded in narrowing the gap. Ahead of the debate, Biden had a substantial lead over the president, and many considered the debates as the president's chance to hit back.

While markets usually prefer Republican, pro-friendly presidents, they also prefer certainty. A tighter race adds to uncertainty. In 2020''s case, it also increases the probability of an inconclusive election. Trump refused to say if he would accept the results. That opens the door to disputed elections and a constitutional crisis.

While fellow Republicans would force him to concede in case of a landslide victory for Biden – considered a 10% gap in the popular vote – he may fight hard and claim fraud if Biden's victory is narrower.

A disputed result could trigger a recount and be litigated, repeating the scenario in 2000, when Florida was eventually decided by 537 votes in Florida. However, 2020 could see the elections fought over on the streets. Late in the debate, Trump refused to condemn white supremacists and even mentioned one group by name. He asked them to "stand back and stand by" – in what can be seen as a threat of violence. 

Most voters have already made their minds and the 90-minute televised clash is unlikely to have made significant waves. Nevertheless, the debate raises the chances of a contested election – a detrimental outcome for markets. 

S&P futures are down in the wake of the debate and could continue deteriorating, regardless of what snap polls say about who won the acrimonious mud-slug. 

Moreover, the bad blood also lowers the odds of Congress agreeing on a new fiscal stimulus deal. The time window was already narrowing ahead of the vote and as both parties are set for a battle over nominating a Supreme Court Justice. 

See 2020 Elections: How stocks, gold, dollar could move in four scenarios, nightmare one included

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.

Analysis feed

FXStreet Trading Signals now available!

Access to real-time signals, community and guidance now!

Latest Analysis

Latest Forex Analysis

Editors’ Picks

EUR/USD hits the highest in a month on stimulus hopes

EUR/USD has advanced toward 1.1850, reaching the highest since mid-September. US lawmakers have reportedly narrowed the gap in stimulus talks. The safe-haven dollar is on the back foot and investors are shrugging off concerns about new European COVID-19 cases.


GBP/USD bounces on better market mood

GBP/USD has recaptured the 1.2950 level after a call between Brexit negotiators was labeled as constructive. PM Johnson is set to put the Greater Manchester area under lockdown and US fiscal stimulus talks are eyed.


XAU/USD struggles for direction, stuck in a range near $1900 mark

Gold extended its sideways consolidative price moves through the early North American session and remained confined in a narrow trading band, around the $1900 mark.

Gold News

US Markets React: Gold gains, equities and dollar tumble on stimulus jitters

The stimulus election minute, the most popular dance in Washington, went through another few elaborate rounds on Capitol Hill today with Nancy Pelosi's office reporting progress in afternoon talks with Steven Mnuchin.

Read more

WTI extends the consolidation around $40.00 ahead of API

Prices of the barrel of WTI extend the consolidative mood for yet another session on Tuesday, always around the key $40.00 level.

Oil News

Forex Majors