The markets are afraid of Trump

During the debate, the overnight futures markets rallied, raising the value of broad stock market gauges like the Standard & Poor’s 500-stock index by two-thirds to three-quarters of a percentage point. This was a consequential move, and because it was driven by the reduced chance of a Trump presidency, it reveals that the market believes that stocks would be worth more if he were to lose the election. Four pieces of evidence support this interpretation.

First, the rally played out in virtual lock step with Mr. Trump’s debate performance. When Mrs. Clinton pummeled him over his tax returns, stocks rose. And this pattern of stocks rising in response to Mr. Trump’s miscues continued through the evening.

Second, the rally occurred between 9 and 11 p.m. on a Monday, typically a fairly tranquil time and, in this case, a stretch in which there was no other important economic or financial news. This suggests that the rally was not driven by other factors. Lisa Brown, principal at Gorgon Capital Research, said, “The only thing going on that would move markets in this time frame would be the debate.”