The first presidential debate is set for Thursday evening, with a close race anticipated. Unusually early in the election cycle, this debate might lack detailed policy discussions. Citi analysts expect any equity market effects to be short-lived.

Typically, markets price election risks about two months before voting. “We may see some weakness as markets anticipate the looming November event,” analysts noted. They predict the debate’s policy discussions will be surface-level and not address fiscal reduction, adding to market fragility.

Citi highlights the likelihood of a divided government post-2024 election, especially if a Democrat wins the presidency but struggles to maintain Senate control. This outcome could stabilize the bond market amid current poll uncertainties.

Analysts believe that only a poor debate performance from either candidate would significantly impact November’s election. They suggest near-term market drivers will be Federal Reserve actions, macroeconomic data, and the earnings season before the election’s impact later in the summer.