After an unpredictable and bitter campaign season, Wall Street is eyeing its preferred 2016 election outcome: A Hillary Clinton presidency offset by a Republican-controlled Congress.
Evidence of the market's clear inclination for a Clinton victory has been seen at key junctures in the race, such as when stock futures surged in the moments after the first presidential debate, which was widely seen as a win for the former secretary of state.
"The S&P 500 futures exploded higher," recalled Gregori Volokhine, president of Meeschaert Capital Markets. "It was obvious which candidate the market prefers."
That preference also was on display in response to news about Clinton's email investigation, including Sunday, when stock futures spiked higher after the FBI cleared the Democratic candidate in the latest review of emails linked to her private server.
Analysts view Clinton as a known quantity who is likely to maintain many of the policies of President Barack Obama. In contrast, Republican Donald Trump is viewed as a wildcard with no public service record and a penchant for lambasting everything from free trade deals to the Federal Reserve to people who contradict him.
A surprise win by Trump, who has consistently trailed in the polls, could spur a sharp negative reaction on Wednesday, although markets could steady after that.
"The big move would be caused just by the unknown of what he might do and the perception that he's volatile," said Michael Scanlon, managing director of Manulife Asset Management.
"Then the reason I temper that and say it would be short-lived is that we still have a government with checks and balances. It's not like he's being elected king or anything like that."
Market likes gridlock
While the market has shown it favours Clinton in the White House, that does not extend to Democrats in Congress.
When Clinton appeared to pull away significantly from Trump in polls last month, some analysts expressed worry that a Democratic congressional sweep could lead to efforts to tax business more heavily, or take other steps viewed as anti-growth.
The market is accustomed to having a Democratic president offset by a Republican Congress and views a change to that equilibrium as a potential threat.
On Monday, "The market rallied on the assumption that the GOP should manage to retain control of one house, if not both houses, of Congress, thereby ensuring an environment of continued political gridlock," said Briefing.com analyst Patrick O'Hare.
"It's a view we suspect that doesn't register quite as neatly on Main Street, where millions and millions of votes will be cast today on the basis of wanting to see some meaningful changes."
As far as election evening trading, several leading banks, including JP Morgan Chase, Citigroup and Credit Suisse, plan to provide US staff overnight in expectation that volume will be elevated.
"JP Morgan will have some traders staffed on the New York trading desks during the night hours, ready to support our Asia trading teams manage any potential spikes in volume," a spokesman said. "That is similar to what we did for the Brexit vote."
Although US stock markets will be closed when the election results begin to come in, there are many other available avenues to trade, including the foreign exchange market and the S&P 500 futures market.
Trading volume likely will rise in spurts as key results are announced, such as critical swing states in the presidential contest, including Florida, North Carolina and Ohio.
"Looking at the last election, it seems fair to say that the result comes around midnight," said Erik Nelson, a foreign exchange analyst at Wells Fargo. "I would say around midnight we would get the most volatility as we get a little more sense of what is going on."
JJ Kinahan, chief market strategist of TD Ameritrade, will be monitoring multiple television screens and tracking political blogs.
"I'll be doing what every other loser trader does, sitting in front of my screen and trying to trade futures," he said. "There is going to be opportunity."