As Donald Trump widened his possible path to the White House with a victory in Ohio, the country’s stock index futures plummeted and global markets in general reacted violently to the possibility that Hillary Clinton could lose this race, defying the polls.
Traditional battleground states have remained close but so have states that were expected to be held easily by Clinton, leading many analysts to believe that her chances of winning the campaign overall are waning.
With many networks calling the crucial state of Florida and also North Carolina for Mr Trump, financial markets have been abuzz with a probable upset.
There was a 5 percent drop in the S&P futures ESc1 on news of those state results, and the Dow Industrials futures slumped over 690 points.
The financial community as a whole has seen Clinton as the safe bet for stability in the markets, while a Trump presidency is expected to have the opposite effect due to his radical stance on trade, national security and foreign policy.
“The fact is that a Hillary win is looking far less likely now and not many analysts hedged for this, so we are seeing an exodus,” said Stuart Poulson, Head of Corporate trading at Nikko-Desjardins Asset Management. “This is why we’ve seen over a million contracts changing hands on the S&P 500, and the index over 4 percent down. Similar results for other areas of the markets too. It’s still way too early to call but Trump certainly has a good chance now.”
Reflecting investor anxiety over a Trump victory, the CBOE Volatility index soared over 35 percent. The Mexican peso took a battering as it fell to a record low of 20 versus the greenback.
Ameriprise Financial chief analyst David Joy said, “You have to admit that not many polls and experts saw this situation occurring as we move towards the evening polls. It’s going to be a big shock to the system if Trump wins and you are seeing a lot of scrambling around not just on Wall Street but in Asian markets too. Asset prices are hitting very surprising levels. There’s still a long way to go today but preliminary results show that this is going to be very close.”
