As the US election draws closer, the market is positioning itself for a potential Donald Trump victory and the subsequent shake-up to government spending that would come with his second term. This follows the Republican candidate pulling significantly ahead of Democratic nominee Kamala Harris in some prediction markets.
At the start of October, Polymarket and Kalshi, where bets can be placed on the election’s outcome, started moving in Trump’s favour. Both now put the odds of him winning at over 60 per cent. This trend has slowly been followed by traditional polls, with some now having Trump slightly ahead in important swing states. The FiveThirtyEight model, which aggregates polls as well as economic metrics, is tighter than the betting market, but still has Trump winning 54 out of 100 scenarios fed into its model for the 5 November vote.