Investors are showing signs of favoring a potential second Donald Trump presidency following President Joe Biden's lackluster debate performance. Despite Biden's debate struggles, the S&P 500, Nasdaq Composite, and Dow Jones Industrial Average have only seen marginal declines since the debate. Market leader Apple's shares have gained about 1.6%, while Amazon's stock has remained steady. There is also client interest in rotating into 2016 "Trump Trades" in the cyclical and small-cap space, driven by expectations for fiscal expansion, reflation, and less regulation under a Trump presidency. However, the AI trade, represented by Nvidia, has seen a 3% decline post-debate. Investors are reflecting on the pro-business environment and solid returns during the first Trump presidency, despite unexpected events like the COVID-19 pandemic and the storming of the Capitol. Wharton professor Jeremy Siegel notes a mild market preference for Trump due to his business-friendly policies, as evidenced by a rise in S&P 500 Futures during the debate. Goldman Sachs also indicates a close presidential election, with Biden trailing Trump in national polling and key swing states. The market has reacted with modest moves higher in equity futures, Treasury yields, and the dollar, with a marginal rise in the implied probability of a Republican win. However, it's noted that the implications of Trump's policies are not a guaranteed win for investors, as shares of clean-energy companies are sliding, potentially signaling concerns about a Trump victory. Overall, the market seems to be cautiously leaning towards a potential Trump presidency, but uncertainties remain regarding the implications of his policies.
