As Americans head to the polls in a historic election, markets are holding steady, with investors keeping a close eye on the presidential race between Republican candidate and former President Donald Trump and Democratic candidate Vice President Kamala Harris. In what many are calling the tightest presidential contest since 1972, polling indicates that Trump and Harris are locked in a virtual tie, sparking intense interest and anticipation across the nation. The closeness of this race has left many wondering if we’ll have a clear outcome by election night—or if the result could stretch into Friday, echoing the delayed results of the 2020 election.

First Past the Post: Securing 270 Electoral Votes

The U.S. presidential race operates under the electoral college system, requiring a candidate to secure a majority of at least 270 out of 538 electoral votes to win. Each state’s number of electors depends on its population and congressional representation, with a minimum of three electors per state and an additional three from Washington, D.C. However, this year’s election isn’t just about the White House; the composition of Congress could be just as crucial in determining the next president’s ability to govern effectively.

A Divided Congress Could Shape the Next President’s Agenda

The makeup of Congress will have significant implications for either candidate’s policy agenda, given the current split between the two parties. The Senate, with its 100 seats, is currently controlled by Democrats with a slim 51-seat majority (including three independents who caucus with the Democrats). Meanwhile, Republicans hold a slight edge in the 435-seat House of Representatives, with 217 seats compared to the Democrats’ 213, leaving three seats vacant.

The direction of fiscal policy, judicial appointments, and legislative agendas will depend on which party controls Congress. Seth Carpenter, Morgan Stanley’s chief global economist, noted the challenges that lie ahead if Congress remains divided. “Polling continues to get closer, not clearer, as we approach voting day,” he remarked, drawing parallels to 2020’s Senate runoffs in Georgia that delayed the balance of power in Congress by several months.

Poll Closing Times and the Potential for Delays

Georgia is set to be the first state to close its polls at 7 p.m. ET, followed by North Carolina at 7:30 p.m. ET and a series of key states throughout the evening, including Pennsylvania, Michigan, Wisconsin, and Arizona. However, Barclays cautioned that several states may delay processing mail-in ballots until after polls close, adding potential delays to the timeline.

In states like Michigan, North Carolina, and Georgia, election officials are permitted to begin processing mail-in votes before November 5, which could expedite results. By contrast, Pennsylvania and Wisconsin are expected to start counting only on Election Day, while Nevada will accept mail-in ballots postmarked by Election Day until four days after the election. Arizona, where 80% of registered voters are expected to vote by mail, allows absentee ballots to be dropped off as late as November 5. Given the volume of mail-in votes and the complexities of ballot-counting in populous areas like Maricopa County, these factors may extend the waiting period for final results.

Swing States in the Spotlight

Attention is particularly focused on the so-called swing states—Georgia, Pennsylvania, Michigan, Wisconsin, Nevada, Arizona, and North Carolina—which both candidates have targeted heavily in their campaigns. These battleground states are expected to determine the winner, making them the focal point for both campaigns and the media. The stakes in these states are high, and with both candidates putting extensive resources into winning them, the results could come down to a razor-thin margin.

Market Reactions and Historical Trends

Despite the uncertain outcome, markets are staying relatively calm as initial vote counts trickle in. Deutsche Bank’s Henry Allen observed that historical market responses to presidential elections have varied. “In three of the past six elections since 2000, the S&P 500 rose by the end of November, while it fell in the other three,” he noted. “Treasury yields showed mixed results as well.” Allen explained that market expectations often shape outcomes, pointing to the contrasting reactions between Obama’s anticipated win in 2008, which caused little market movement, and Trump’s unexpected 2016 victory, which triggered a sharp increase in treasury yields.

Implications for Fiscal Policy and Legislative Gridlock

The next president’s ability to implement policy will be directly influenced by the balance of power in Congress, especially if a divided government results. Deutsche Bank’s analysts emphasized that while Republicans may secure a Senate majority, the House remains uncertain. “Historically, the president’s party holds the House, though this isn’t guaranteed—the 2012 election was a recent exception,” they explained. Carpenter added that he anticipates a split Congress overall, noting, “If one party does gain full control, Republicans have a better chance than Democrats.”

A split Congress would likely lead to gridlock, stalling both parties’ more ambitious policy goals. For example, a Trump presidency with a Democratic House might face pushback on proposed tax cuts, while a Harris presidency with a Republican Senate could struggle to pass expansive social programs. Both parties would need to navigate these dynamics carefully to achieve any significant legislative victories.

With the polls still open in much of the country, early indicators suggest a suspenseful and prolonged counting process. Analysts and investors will be closely watching how initial counts impact market movements and whether any clear trends emerge from critical swing states. Ultimately, this historic election could hinge on a handful of closely contested states, and the final outcome may take several days to materialize.

As the nation awaits the final tally, it’s clear that the results of both the presidential and congressional elections will profoundly shape the policy landscape for years to come. And with the balance of power at stake, every vote will count.