The Trump/Harris Debate and ETFs: What Might Happen

Perceptions about the debate may drive ETFs on Wednesday.

Tonight’s presidential debate is a big deal for both candidates. With the race in a dead heat according to most polls, both candidates are looking for a slight edge that could help them cross the finish line come election day.

Well aware of the significance of the debate when it comes to the election outcome, investors may react to what they see once markets open the following day.

Perceptions of who won and who lost the debate could drive ETFs up or down as investors attempt to price in potential policy shifts.

Crypto ETFs and Trump

Over the past few months, ETFs tied to cryptocurrencies—like the iShares Bitcoin Trust (IBIT) and the Fidelity Ethereum Fund (FETH)— have moved based on the odds of a Trump presidency.

Trump was a headline speaker at the world’s largest Bitcoin conference earlier this year, while the Republican National Committee Platform Committee adopted a pro-crypto policy platform.

ETFs tied to highly regulated industries, like Health Care Select Sector SPDR Fund (XLV) and Financials Select Sector SPDR Fund (XLF) have also tended to rise with Trump’s election odds, likely due to the potential for fewer regulations under a Trump administration.

On the other hand, Invesco Solar ETF (TAN) and the iShares MSCI China ETF (MCHI) don’t seem to do well when Trump’s odds rise. 

Trump has tended to favor fossil fuels over alternative energy, and he’s promised to put tariffs of at least 60% on all Chinese imports if he is elected president again.

In that regard, those ETFs could get a boost if Vice President Harris comes out ahead in the debate. 

Heading into the debate, Trump has a 52% chance of winning the election, while Harris has a 47% chance, according to the average of betting odds compiled by RealClear Polling.

National polling averages put Harris up by 1.3 percentage points over Trump, while the two candidates are neck and neck in swing state polls.