Here’s how stocks see the presidential race

The stock market is almost dead flat early Tuesday, ahead of the tonight’s presidential debate between Democratic nominee Vice President Kamala Harris and Republican candidate former President Donald Trump.

Investors good have reason to sit on their hands for the moment and see how it plays out. It’s been a tumultuous election season that has involved the cataclysmic debate performance of President Biden on June 27, the attempted assassination of Trump on July 13, and Biden’s decision to drop out of the race on July 21.

Polling and prediction markets both have the election as a dead heat, with many seeing tonight’s debate — set for 9 p.m. ET in Philadelphia — as perhaps one of the few remaining events before November that could potentially shake up a race that seems to be solidifying.

Gauging the state of the race by the looking at the stock market is always a fraught exercise, given the plethora of company specific and economy-wide elements that can impact share prices.

But Goldman Sachs thematic baskets of stocks that stand to benefit from either GOP or Democratic policies seem to confirm the topsy-turvy nature of the race since the Biden-Trump debate.

The GOP basket — weighted toward companies such as steel firms that would benefit from steep tariffs Trump has promised — opened up a lead in the aftermath of the first debate and the assassination attempt of Trump.

But that lead collapsed once Biden announced his withdrawal from the race, with the Democratic policy basket — weighted toward solar firms and home builders, among others — taking the lead.

Both baskets took a bath with the steep 10% sell-off that hit the market in early August. But the Democratic convention in Chicago seemed to give the Democratic basket a lift by a good four percentage points or so.

Whether that changes drastically in the aftermath of tonight’s debate could shed a bit of light of who won, at least in the eyes of traders.