According to Citigroup strategists, both Trump and Harris' political platforms appear to be negative for U.S. stocks, with Democratic candidate Harris' plan to raise corporate taxes seen as having the greatest impact.

The team, led by Scott Chronert, found that Harris's platform would hit fair value of U.S. stocks by 4% to 6%. "This is primarily due to the impact of higher corporate tax rates as a direct result of a Harris presidency," they wrote in a report.

Meanwhile, the impact of the Republican candidates' planned policies is expected to be between 0% and -4%. Strategists say Trump's plan will deal the biggest blow to the U.S. fiscal deficit, which will be the main issue going forward.

However, they noted that such a move would only be possible if the winning candidate's party swept both the Senate and the House of Representatives. "Either candidate faces a divided Congress, which would mitigate near-term risks to fair value," they said.

S&P 500 gains supported by corporate earnings growth

Trump has pledged to cut the federal corporate tax rate from 21% to 15%, while Harris has proposed raising it to 28%. Goldman Sachs Group Inc. strategists estimate the U.S. election could have a significant impact on S&P 500 earnings, with Trump's planned tax cuts boosting earnings and Harris' plan reducing profits.

Separately, strategists at BNP Paribas estimated that a 10% U.S. import tariff worldwide and a 60% tariff on China could reduce the S&P 500 by 9% to 12%, depending on how the Fed adjusts its policy.

Neither campaign immediately responded to requests for comment.

Citi said that overall, forces such as investor sentiment about a soft landing, actions by the Federal Reserve and tailwinds from artificial intelligence will have a more significant impact on U.S. stocks than on voting day on November 5.

"The election results and impact are seen as gradual," Chronert said.

The article is forwarded from: Jinshi Data