Bank of America's Trump-Harris playbook: How the stock market will react to the various election scenarios

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The firm broke down what a variety of election outcomes could mean for stocks.

Tuesday's U.S. presidential election is the biggest catalyst this week for equities and will set the tone for stocks over the near-term, according to Bank of America. But don't expect a big move, equity and quant strategist Ohsung Kwon said. He doesn't expect the S & P 500 to make a move of 2% or more as such a reaction has only occurred a quarter of the time on Election Day for contests going back to 1928.

Split Republican control A Trump White House with a largely Democratic Congress is overall neutral for equities, Kwon said. With this scenario, the Trump administration could deliver the tariffs the former president has proposed, but his deregulation efforts could be stalled, Kwon added. Democratic clean sweep A win for Vice President Kamala Harris and a Democratic majority in Congress could see corporate taxes rise to 28% from 21%, with a hit to earnings for stocks of as much as 5%, Kwon said.

 

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Bank of America's guide to the election and stocks that win under Trump or HarrisHere's what Bank of America analysts think the different election outcomes could mean for stocks.
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