The presidential election has finally become the big threat for markets

The presidential election’s final days could present new headwinds for markets and overshadow what are typically major events — a Fed meeting and the monthly employment report.

The Federal Open Market Committee on Wednesday is expected to signal that it is close to raising rates if the economy and financial conditions are right. It could even adjust the language in its statement to point more clearly at its next meeting, in December, as the time when it would hope to raise interest rates.

The employment report Friday, always important, is expected to show that 175,000 jobs were created in October, and that the unemployment rate was a low 4.9 percent, according to Thomson Reuters. There are also dozens of earnings, including Facebook, BP and Pfizer, and other important data, such as Tuesday’s auto sales and ISM manufacturing data.

But in the last week of campaigning before the Nov. 8 election, the market could also be vulnerable to headline risk. Markets have been comfortable with the view that Democrat Hillary Clinton looks set to win the White House and that Republicans would likely hold onto the House of Representatives. That would create a status quo situation where there would continue to be gridlock. Wall Street has viewed GOP nominee Donald Trump as too unpredictable, and he has been trailing in the polls.

Friday’s revelation that the Federal Bureau of Investigation is reviewing new evidence in connection with its investigation of Clinton’s email server shook markets, sending stocks lower. The emails were found during the FBI’s investigation into former Rep. Anthony Weiner, husband of a senior Clinton aide. Weiner is under investigation for allegedly sending sexually explicit messages to a minor.

“The market has gotten pretty comfortable with the thought of a December hike which de-emphasizes some of next week’s Fed meeting and jobs report, but this election is now turning into a situation with the potential for Brexit-like volatility,” said Scott Redler, partner with T3Live.com. Brexit is used to describe the U.K. vote last June to leave the European Union, which led to a temporary market sell-off.

Art Cashin, director of floor operations at UBS, said if Clinton wins, the investigation will be hanging over her. “It certainly means that probably before the inauguration if the Republicans hold the House, there will be an investigation that lasts four years,” said Cashin.

Redler, who follows short-term technicals, said there were already some warning signs for stocks without the added election uncertainty. “Breakouts are failing. Stocks are losing upward momentum, and the indices make it seem as if everything is fine and dandy. It’s a push, pull,” he said.

The S&P 500 closed at 2,126 Friday, a decline of 0.7 percent for the week, but also below a key support level of 2,130. The VIX, the market’s fear meter, jumped 5.4 percent to 16.19 Friday, and was up more than 20 percent for the week.

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