The first debate between Trump and Harris has ended, how is the market reacting?

On the evening of September 10th local time, the second debate of the 2024 US presidential election was held as scheduled.

This debate marked the first direct confrontation between Vice President Harris, who replaced Biden as the Democratic presidential candidate, and Republican presidential candidate Trump. From the performance of both sides, Harris's debate strategy seemed to aim at provoking Trump, and Trump's somewhat out-of-control performance "played right into the trap."

Citing comments from CNN anchor on Global Times, Harris's supporters must be very pleased tonight because Harris "hit Trump's sore spots multiple times," making Trump "vulnerable" to the point where he had to "come up with more arguments."

After the debate, according to Global Times citing the latest news from CNN, following the end of the first televised debate between Harris and Trump, well-known American singer Taylor Swift (nickname "TayTay") announced her support for Harris's presidential campaign on social media.

Overall, the market reaction was relatively stable. During and after the debate, US stock index futures fell, with S&P 500 futures down 0.5%, Nasdaq 100 index futures down 0.65%, and the US Dollar Index down 0.23%.

As of the time of publication, US stock index futures continued to decline, with the US Dollar Index's decline expanding to 0.3%.

Lack of Substantial Policy Discussion

Wall Street generally believes that this debate did not reveal more substantive details.

Quincy Krosby, Chief Global Strategist at LPL Financial, said:

"Neither side revealed specific details. I think those who support Trump will believe he won the debate, while those loyal to the Democratic Party will think she won the debate."

SHIER LEE LIM, Chief FX and Macro Strategist for CONVERA Asia Pacific, commented:

"So far, the debate between Harris and Trump does not seem to have had a significant impact on the market, consistent with the relatively low volatility expectations before the event. Nevertheless, this debate could still be an important catalyst for changing election probabilities.

"The election outcome may have meaningful implications for fiscal policy and financial markets. Republicans are reportedly considering using tariffs to offset tax cuts, while Democrats may seek to raise corporate and wealth taxes to fund spending increases."

Weakening US Dollar May Indicate Better Performance by Harris

Some observers also suggest that Harris's performance exceeded expectations. If investors believe this will increase her chances of entering the White House, it may continue to affect the prices of some assets in the coming days.

Eric Beyrich, Portfolio Manager at Sound Income, stated:

"They did not put forward strong economic views, but overall, Harris outperformed Trump."

"The market indeed does not want sharp statements, what they want is clarity."

SONU VARGHESE, Global Macro Strategist at Carson Group, said:

"I don't think this debate will change many people's minds because voters still have serious disagreements. The only sign is that Harris has taken the lead in predicting the market, but the chances of victory for both sides are still very close."

"(This debate) did not involve much substantive discussion about policies. Neither candidate advocated for radically different economic policies from the current ones."

"We will find that many economic policies implemented next year will depend on the composition of the Senate and the House of Representatives, and negotiations related to extending the 'Tax Cuts and Jobs Act' (signed into law by former President Trump in 2017)."

Rob Carnell, Head of Research for Asia-Pacific at ING, said:

"I don't think there's too much in the markets here... There doesn't seem to be too much particularly economic going on right now. I think Harris seems to be leading Trump quite well."

"You would expect, if he (Trump) was doing better, you would see the dollar stronger. So I think that's how the market is looking at it. Slightly favoring Harris."

KARL SCHAMOTTA, Chief Market Strategist at CORPAY in Toronto, said:

"No knockout blow yet, but with Kamala Harris leading Donald Trump by a slight margin in predicting the market, the dollar is edging lower."

"The Mexican peso, Canadian dollar, and Chinese yuan may rise in low-volume trading."

Focus on Future Employment Data and Campaign Activities

Given that this debate did not have a significant impact, some believe that future employment data and statements related to campaign activities will determine the final outcome of the election.

VASU Menon, Managing Director of Investment Strategy at Oversea-Chinese Banking Corporation (OCBC) in Singapore, said:

"Today's debate will not have a significant impact, and there were no clear winners. The data in the coming weeks, especially the economic performance shown by employment data, and their statements in their campaign activities before November 5, will determine the final outcome."

Some investors have expressed that while the presidential election is largely the focus of investors, politicians are also beginning to worry that it has become intertwined with more direct market catalysts, including concerns about the weakness of the U.S. economy and uncertainty about the extent of the Fed's interest rate cuts