Uncertainty of U.S. election panic-like markets as early results show a close race.

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A close race in the US presidential election has led to market volatility as futures fluctuate wildly between gains and losses.

S&P 500 futures were deep in the red during post-trading as investors were reluctant to wait for ballots to be counted. Later, they swung into positive territory and back again as no clear winner emerged and the prospects of a contested election increased.

At the time of publication, after a similar rollercoaster ride, the Dow futures are also still about 1 percent lower. The futures contracts on the technology-heavy Nasdaq are 1 percent higher, but are losing some momentum after previously rising by almost 3 percent.

This follows strong gains on Wall Street on Tuesday, with the Dow posting its best percentage gain since mid-July.

A prolonged battle between Republican President Donald Trump and his Democratic challenger Joe Biden is ultimately the worst outcome for traders as markets hate uncertainty.

European stocks have also sold on the back of the news, as the result is still on a knife edge.

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In most national polls released the month before the election, Biden was ahead of Trump according to FiveThirtyEight data, with betting odds largely in his favor last week.

However, the election is now closer than the polls ever suggested, as support for Trump was underestimated. The race for control of the Senate also remains undecided.

Stuart Clark, portfolio manager at Quilter Investors, said we are “in a state of electoral paralysis” as none of the candidates are willing to give in and the competition could end up in court.

“With the global COVID 19 situation weighing on market sentiment, we should expect more volatility until we at least have a better sense of the outcome of this election,” he said.

“What the markets will be disappointed about if this issue drags on is the lack of a quick stimulus package, which would inevitably drive up stock prices. We will have to wait and see what all this means for the economic recovery, but in the short term it is not the scenario that investors wanted.

In the 2016 presidential election, futures fell by 5 percent when Trump won the surprise victory over Hillary Clinton. The futures recovered hours later in the morning in a similar manner to today’s events.

In a speech at the White House on Wednesday, Trump declared an unsupported victory and claimed that a fraud had been committed.

“This is a fraud against the American public. It is an embarrassment to our district,” he said. “We have been preparing to win this election. Frankly, we won this election.”

He also said that he plans to go to the U.S. Supreme Court to fight the election results, which adds to the current uncertainty in the marketplace. Millions of votes have yet to be counted.

said Neil Wilson of Markets.com: “Donald Trump has just declared war by declaring victory before all counting is complete. He has played the card of voter fraud, and this has undoubtedly unsettled the markets, as a protracted battle in court is exactly what investors don’t want.

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