"Trump Trade" is in full swing, not only popular in the US stock market recently but also starting to affect the European market. However, BlackRock believes that the market is underestimating the risk of the US presidential election results getting deadlocked.

On Thursday local time, Jean Boivin, Managing Director of the Research Department of the global asset management giant BlackRock, stated in an interview with Bloomberg that if a candidate challenges the election results, it could lead to "several weeks of very chaotic legal disputes," which could disrupt the capital markets.

Boivin stated that attempting to trade on the US election is a "stupid move," and what really needs attention is the fiercely competitive election situation. This scenario may be unfavorable to the market, but it has not been priced in by the market. He believes that investors should be prepared for this.

If the election results get deadlocked, voters and investors may have to wait until election night to know the outcome, especially in the possible scenario where both candidates choose to challenge the vote count in key swing states.

Under the dominance of the "Trump Trade" and the absence of a "hard landing" in the economy, the US stock market remains close to historical highs this month, while the US bond market has triggered a sell-off wave comparable to that of 1995.

Analysis suggests that the rise in US bond yields is to some extent driven by Trump's advocacy of high tariffs, which may exacerbate inflationary pressures.

In the exchange rate market, the US dollar index has risen to a three-month high, poised to achieve its best monthly performance since 2022. Standard Chartered Bank estimates that around 60% of this trend can be attributed to the prospect of Trump winning.