Trump or Biden? The Stock Market Doesn’t Care.

The markets assume that former President Donald J. Trump has an even chance of winning the November election.

So far, it appears they don’t care either way.

The political prediction markets — which allow traders to place bets on the outcome of the November election — show that the presidential race is tight.

After trailing for months, President Biden has moved slightly ahead of Mr. Trump in the betting on Predictit, the longest-running commercial prediction market in the United States. On Betfair, a robust British prediction market that is officially closed to U.S. residents, Mr. Biden has moved within one percentage point of Mr. Trump. Polymarket, an offshore market that accepts only cryptocurrency, shows Mr. Trump slightly ahead.

“The prediction markets right now are telling us that the presidential election is basically a tossup,” said Eric Zitzewitz, a Dartmouth economist. “And the stock market isn’t reacting negatively to that at all.”

An Odd Year

This is puzzling in several respects.

Stocks have been booming this calendar year. And with low unemployment, high economic growth and increasing productivity, you would expect that “the presidential incumbent would be a shoo-in,” said Jim Paulsen, an independent economist and a longtime market strategist. “I would argue that if you didn’t know anything else about everything that was going on, and somebody told you about the recent economic numbers, we’d be celebrating it as nirvana.”

But that’s not happening. “It looks like something is broken,” he said.

Looking just at the economy, the culprit could be inflation. It peaked at 9.1 percent in