As Democrat Hillary Clinton and Republican Donald Trump pushed their closing arguments ahead of next week’s U.S. presidential election, financial markets were rattled on Wednesday by opinion polls showing a tightening White House race. While most national polls still favor Clinton to win, she has lost the comfortable lead she held late last month and investors are starting to factor in the possibility that the New York businessman might pull off a victory on Nov. 8. World stocks, the dollar and oil fell on Wednesday, while safe-haven assets such as gold and the Swiss franc rose as investors showed nerves over the tightening race.
“The lead up to the U.S. presidential election was always expected to be lively but the events of the last couple of days have seriously taken their toll on investor sentiment,” said Craig Erlam, senior market analyst at Oanda foreign exchange company in London.
Investor anxiety has deepened in recent sessions over a possible Trump victory given uncertainty about his stance on issues including foreign policy, trade relations and immigrants. Clinton is viewed by markets as a candidate of the status quo.
Trump, who has never previously run for elected office, has run an unorthodox campaign, with policy proposals including reviewing trade pacts such as the North American Free Trade Agreement and building a wall along the border with Mexico.
Currency traders have sold the dollar this week in part because they suspect Trump would prefer a weaker dollar given his protectionist stance on international trade, and in part because the uncertainty surrounding a Trump win might lead to a more dovish stance from the Fed in the months ahead.
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A Reuters equity market poll last month showed a majority of forecasters predicted that U.S. stocks would perform better under a Clinton presidency than a Trump administration.
U.S. stocks were also lower on Wednesday afternoon after the Federal Reserve, in its last policy decision before the election, kept interest rates unchanged but signaled it could hike in December.
Clinton’s narrowing lead over Trump since early last week could include negative fallout from the re-emergence of a controversy over her use of a private email server, instead of a government one, when she was U.S. secretary of state.
An average of polls compiled by the RealClearPolitics website showed Clinton just 1.7 percent ahead of Trump nationally on Wednesday, with 47 percent support to his 45.3 percent.
Clinton’s position is stronger than national polls imply given that the race is decided by the Electoral College system of tallying wins from the states. Some 270 electoral votes are needed to win and Democrats have a built-in advantage, with large states such as California and New York traditionally voting Democratic.
Clinton looked likely to win at least 226 electoral votes, leaving her needing 44 votes to pick up from the 132 votes at stake in “toss-up” states such as Florida, North Carolina, Virginia, Ohio, Iowa, Arizona, Colorado and Nevada, according to estimates by RealClearPolitics on Wednesday afternoon.
Trump, on the other hand, has a steeper path to climb, looking likely to win 180 electoral votes and so needing 90 of the 132 votes from the current battleground states, the website showed.
Both candidates are focusing their final campaign efforts on those crucial states.
FOCUS ON BATTLEGROUNDS
Clinton has been spending a lot of time in Florida, which yields a rich haul of 29 electoral votes. In a tight race there, the RealClearPolitics average of polls from Florida put Trump one point ahead of Clinton on Wednesday.
“No state is more important, and it’s close,” a Clinton aide told reporters on Tuesday. “It’s a state that Trump has to win … we don’t believe he has any path without Florida.”
Clinton’s campaign says it has always expected a close race, and for polls to tighten further in its final days, independent of the announcement last Friday of a renewed FBI review of emails that might pertain to her use of a private email server.
On Wednesday and Thursday, Clinton was set to campaign in Nevada, a swing state, and Arizona, a traditional Republican stronghold that the campaign believes Clinton can win this year.
Trump, holding events in Florida on Wednesday, told a rally in Miami he was winning in opinion polls in the state but urged the crowd to act as though he was behind. “Don’t believe it, don’t believe it get out there and vote. Pretend we’re slightly behind,” Trump said.
Trump hit many of the same themes he has hammered all week, saying Clinton is dishonest and would be swamped by investigations if she won the White House.
His closing argument includes promises to roll back regulation, beef up immigration rules and root out wrongdoing in Washington by cracking down on lobbying.
On Tuesday, he used the first day of the annual sign-up period for coverage under the Affordable Care Act to criticize President Barack Obama’s signature healthcare law, vowing that if elected he would ask lawmakers to start working on a plan to replace it even before the Jan. 20 inauguration.
Obama, an energetic campaigner for Clinton, defended her and criticized the FBI announcement on new emails in an interview aired on Wednesday.