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The stories that matter on money and politics in the race for the White House

US stocks rallied while bonds fell back as Americans headed to the polls in one of the most significant elections in recent memory, with sweeping implications for global markets.

Tuesday’s moves had echoes of the “Trump trades” of recent weeks in which investors bet on bitcoin and stocks and sold Treasuries. They had pared some of those positions on Monday following weekend polls that cast some doubt on Donald Trump’s chances of victory.

The Mexican peso, which typically weakens when Trump is seen to be doing well, hit its lowest level in two years at 20.35 against the dollar.

“The good news is that the wait for the US election is over, the bad news is that it will be a long night for volatility,” said Bob Savage, head of markets strategy and insights at BNY, who described Tuesday’s mood as “risk on . . . but timidly given the too-close-to-call uncertainty”.

By early afternoon in New York, the blue-chip S&P 500 was up 1.1 per cent while the tech-heavy Nasdaq Composite had gained 1.3 per cent.

Shares in Trump’s lossmaking social media group, Trump Media & Technology, jumped 14 per cent while bitcoin gained more than 4 per cent to trade just below $70,000.

However, the US dollar, which rose in October on expectations of a Trump win, slid to a two-week low against a basket of currencies, down 0.4 per cent on the day.

Wall Street has been preparing for a long night, pausing software updates and booking hotel rooms for suburb-dwelling traders among other logistics.

“There is a hyped-up sense of anticipation as we await the results,” said Mark Dowding, chief investment officer at RBC BlueBay Asset Management. “We all know how much is at stake on this election outcome, but until the polls close we won’t know which way to jump.”

Tuesday’s sell-off in Treasuries was boosted by unexpectedly strong US service sector data, pushing yields on benchmark 10-year notes to 4.34 per cent, up 0.03 percentage points on the day and close to Friday’s four-month peak of 4.39 per cent.

Investors are anxious that there might not be clarity on the winner of the election running into a critical couple of days for global markets, with interest rate-setting decisions from both the Federal Reserve and Bank of England due on Thursday.

William Vaughan, associate portfolio manager at Brandywine Global Investment Management, said the potential for an unclear election result by the time of the Fed meeting contributed “significant uncertainty”, highlighting the four-day wait until the Associated Press made its call on the winner of the 2020 election.

The Ice BofA Move index, a keenly watched gauge of investors’ expectations of future volatility in US Treasuries, on Monday hit its highest in more than a year as a mixture of political and interest rate uncertainty unsettled the $27tn market.

Analysts at UBS said levels implied by options on the S&P 500 index suggested the benchmark could swing sharply at the end of the week. The cost of buying protection against swings in exchange rates such as euro-dollar has also jumped.

The knife-edge election is being viewed as a potential watershed moment by investors. If Republicans were to win the White House and both houses of Congress, investors worry that Trump’s promised mixture of tariffs and tax cuts could feed inflation and put upward pressure on interest rates.

That has led to a rally in the dollar and a rise in longer-dated Treasury yields in recent weeks.

European stock markets moved off their lows as Wall Street rallied, leaving the regional benchmark Stoxx 600 index to recover earlier losses and close flat while the UK’s FTSE 100 ended down just 0.1 per cent.

Elsewhere, UK long-term borrowing costs touched a fresh high for the year, with 10-year yields at 4.54 per cent. That topped levels reached after last week’s Budget fed concerns on government borrowing levels.

For more 2024 election coverage from the NPR Network head to our live updates page.

It’s possible former President Donald Trump will win the election — and also quite possible he loses. But many in Trump’s orbit keep falsely telling his supporters the only way that happens is because of cheating.

Polling indicates a competitive race in seven battleground states that will decide if Trump or Vice President Harris is the next president, states where voters’ political and demographic makeups mean there are no guaranteed winners.

Trump still insists he did not lose the 2020 election, despite numerous recounts and court cases that did not find evidence of fraud. His 2024 campaign is built on that foundation, telling his supporters the only way to “Make America Great Again” in a second term is to vote so that his victory could be “too big to rig.”

A large part of Trump’s closing message in recent weeks has focused on attacking any outcome other than victory as tainted, illegitimate and fraudulent, with no proof or basis in reality.

He has regularly questioned the legality of Harris’ role as the Democratic presidential nominee, calling President Biden’s decision to end his reelection bid and her subsequent selection under Democratic Party rules a “coup.”

After his supporters launched a failed insurrection attempt at the U.S. Capitol on Jan. 6, 2021, Trump has still refused to say if he would accept the results of this election, win or lose.

Eric Trump and his wife, Republican National Committee Co-Chair Lara Trump high-five during a rally for former President Donald Trump in Reading, Pa., on Monday.

Chip Somodevilla/Getty Images

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Chip Somodevilla/Getty Images

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Alongside the Republican National Committee, led by his daughter-in-law Lara Trump, Trump’s legal team has planted the seeds to cry foul in several key states if he loses, like Pennsylvania, North Carolina and Georgia, filing numerous lawsuits seeking to disqualify voters and ballots or demand rule changes they say suppress Republican voters.

The final days of the campaign have seen a barrage of baseless claims about voting rules, possible election outcomes and Trump’s chances to win from a constellation of his family, friends and faithful associates.

Social media site X has been home to a proliferation of false fraud claims about the election, and the site’s owner, billionaire Elon Musk, has used his considerable platform to amplify conspiracy theories about ballot counting and other normal election procedures while misleadingly sharing early voting data to claim a “decisive Republican victory.”

On Monday, Trump’s son Donald Trump, Jr. riled up a partially empty arena in North Carolina by urging people to show up to vote en masse so “you don’t give [Democrats] a week to find that magical truck of ballots.”

Trump himself has posted online that “Pennsylvania is cheating” and often dedicates parts of his rambling rallies to accusing his opponents of cheating while bragging about often-overinflated poll numbers.

In Pittsburgh Monday night at his penultimate presidential campaign rally, Trump said he has been given “about a 96.2% chance” of winning Tuesday, of which there is no evidence.

Many factors go into a Trump loss — or win

Polling, election analysts and math suggests Trump does not have a 96.2% chance of winning enough states to be the Electoral College winner. The reason the race is instead very close is not fraud, but rather several potential warning signs with his third presidential campaign and voters’ reaction to it.

In several of the swing states, there are lingering effects from the public and private pressure campaign he exerted to get Republican lawmakers and officials to overturn his 2020 defeat. The 2022 midterms saw several high-profile Trump-backed candidates who embraced the false fraud claims falter in what otherwise should have been a good year for Republicans.

His feuds with Republicans who defended the election results led to a notable loss of support among independent voters and conservatives who oppose his candidacy.

Efforts the RNC undertook to make inroads with nonwhite voters in the last election cycle have been abandoned in favor of beefed-up election integrity teams. As a result, much of the get-out-the-vote operation has been outsourced to inexperienced third parties.

After the Supreme Court overturned the longstanding Roe v. Wade decision that guaranteed a national right to obtain abortion care, Republicans have lost ground with women, especially in states that have passed strict abortion bans in the aftermath of that decision.

In many states, Trump’s plea for Republicans to “bank your vote” and participate in early voting appears to have paid off, but election data also shows a sizable share of those voters shifted from Election Day. That could potentially lead to lower Republican turnout Tuesday as part of an overall shift in voter behavior since the pandemic-era 2020 presidential race.

All of these factors could lead to a Trump loss when all the votes are counted, or be footnotes if he wins, but none of them involve the widespread voter fraud he has primed his supporters to be ready for, without cause.