Investing.com -- Markets are on edge ahead of the upcoming US presidential election on Tuesday, with analysts indicating that the outcome could significantly impact the market performance, especially the Big Tech sector.
Specifically, according to Wedbush analysts, a potential Trump victory in the race is causing concern among global tech investors due to the possible escalation of the US-China tech conflict and increased tariffs.
“A major change in tariffs and a harsher stance on China we believe would significantly impact the supply chain, Nvidia (NASDAQ:NVDA), Beijing retaliatory impacts on Apple/Tesla likely, and slow the pace of the AI Revolution,” analysts led by Dan Ives said in a note.
Moreover, the position of Lina Khan as Chair of the Federal Trade Commission (FTC) is another critical factor for Big Tech, with her role potentially ending under a Harris administration but likely continuing if Trump remains in office.
“From a Big Tech/AI trade perspective we view overall a Harris White House win as more bullish on the margins and a Trump win as a net negative for Big Tech,” analysts continued.
However, the possibility of a political gridlock with mixed Senate and House results could stall significant policy shifts affecting Big Tech in the short term.
Reflecting on last week's significant earnings reports, Wedbush's team said the strong performance of tech giants such as Microsoft (NASDAQ:MSFT), Alphabet (NASDAQ:GOOGL), and Amazon (NASDAQ:AMZN) confirmed its bullish stance on the sector.
These companies showcased “that the accelerated cloud shift and foundation for the AI Revolution is just starting to get built out for the coming years,” analysts noted.
Despite some initial negative reactions, such as to Microsoft's report, they believe the market will interpret these outcomes as positive indicators for the tech industry's growth trajectory leading up to 2025.