One of the most high-profile market-moving events of the year has arrived.

Americans went to the polls on Tuesday to vote in the presidential election between Donald Trump and Kamala Harris. The result could have an impact on financial markets for the rest of the year and beyond.

For the broader market, Wall Street strategists say the biggest risk would be a contested election in which the outcome is unclear for weeks.

“A close and contested election is the top tail risk we see for U.S. stocks in the days and months ahead, although we also suspect that a Democratic victory could surprise U.S. stock investors as well,” Lori wrote Calvasina of RBC Capital Markets in a note. to customers Tuesday morning.

To address Calvasina’s point, market strategists discussed the potential outcome of a so-called Trump trade if the former president did not win Tuesday night. Over the past month, as betting market odds have moved in Trump’s favor, some sectors have rallied around the belief that the former president would improve the prospects of these companies if elected. For example: financial stocks and cryptocurrencies.

Friday, when new poll shows Kamala Harris leading Trump in Iowasome of these exchanges began to reverse. Bitcoin recently hit a high of $71,000 per coin before briefly slipping below 67,000 after the poll was released. Likewise, the Financial sector (XLF) was the second worst performing sector on Monday, after leading all 11 sectors in October, potentially on the belief that Trump’s policies would be more favorable to banks.

Conversely, strategists pointed to other deals that have lagged over the past month and could outperform if Harris wins. In a note to clients late Sunday, Morgan Stanley chief investment officer Mike Wilson wrote that consumer goods companies that Trump’s tariff policy could harm had priced in the potential negative impacts before the election.

“We see tariff-exposed consumer stocks and renewable energy outperforming in the near term,” Wilson wrote of a Harris victory scenario where Congress ends up in a Red-Blue split. “Financial, industrial and commodity-sensitive sectors could underperform initially.”

Wilson added that a divided Congress could limit the duration of these measures.

“In our view, market leadership in the divided Congressional outcome will likely depend on the business cycle, the Fed’s reaction function, and industry-specific fundamentals after the election,” Wilson wrote.

There has been much debate about what has driven stock markets over the past month as investors have positive third quarter result digestedTHE Federal Reserve easing cycle beginsand a series of data publications showing the American economy is still in solid growth.

At a high level, Trump’s policies are consulted as more inflationary than that of Harris. This would likely cause rates to rise and is one of the factors strategists have attributed to the 10-year Treasury yield (^TNX) has increased by about 70 basis points over the past six weeks.

Wilson wrote that even if a Trump victory sends yields higher, as long as the move is accompanied by lingering expectations of stronger economic growth, stock markets could continue to take rising rates in stride.

Still, Citi equity strategist Scott Chronert pointed out in a note that market sectors like homebuilders (XHB), which are lagging the broader market amid the recent rate hike, would likely benefit from a Harris victory.

“When it comes to Trump, higher rates are seen as relatively negative given the financing angle of most home purchases, both new and existing,” Chronert said of the homebuilder industry . “As far as Harris is concerned, some of his policies would provide direct support to first-time home buyers. Even if they are inflationary, this should benefit businesses in the sector.”

On the more speculative side of the markets, Trump Media & Technology Group stock (DJT) will remain the center of attention, particularly given This could cost Trump billions should the stock crash after an election defeat.

DJT had been roaring over the past month before falling late last week as the election appeared to be close in the polls. On Tuesday, shares were up more than 13% in early trading.

“It’s a binary bet on the election,” Matthew Tuttle, CEO of investment fund Tuttle Capital Management, recently told Yahoo Finance. Catalysts. Tuttle, who holds a short position in the stock, believes it could fall to $0 if Trump loses.

Josh Schafer is a reporter for Yahoo Finance. Follow him on @_joshschafer.

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