According to Evercore ISI experts, market volatility is expected to increase before and may continue beyond the next US election.

Based on Evercore's customer flash poll, the current chances are 55/45 in favour of former President Donald Trump winning.

A "contested result" in the election would "sour sentiment," leading to a further market selloff if uncertainty persists, as reported by Evercore,

A "clean" and uncontested result, on the other hand, is more likely to elicit a favourable response and might result in what Evercore refers to as a year-end "meltup." The Federal Reserve's anticipated rate decreases, managed inflation concerns, strong economic growth, and the rapid use of AI are some of the elements driving this confidence.

In these circumstances, Evercore continues to aim for the S&P 500 to hit 6,000 by the end of the year.

2024 has continued the historical trend of hotly fought congressional control shown in other election years. According to Evercore, double-digit percentage changes, either up or down, are common in these years for the S&P 500.

Evercore presents a number of possibilities for how markets may react to certain election outcomes, broken down by sector.

If Trump wins, industries like finance, oil and gas, and maybe defence would gain, whereas if Kamala Harris wins, renewable energy and Medicaid-related health insurers would gain.

Additionally, the investment bank anticipates a long-term optimistic trend for industries like small-cap stocks and technology, especially software, as these sectors are anticipated to do better in a lower-rate environment.

(Sources: investing.com, reuters.com)