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The resurgence of Donald Trump's election hopes is sending investors running for cover.

Over the past several trading days, stocks, currencies and commodities have embarked on a wild ride as polls show that Mr. Trump has narrowed Hillary Clinton's lead in the upcoming U.S. presidential election.

Suddenly, the Republican candidate's controversial views on trade, defence spending, immigration and corporate taxes are moving from populist rhetoric to something closer to reality – and markets are getting nervous.

"The consensus is that a victory for Donald Trump in next week's presidential election would deal a lasting blow to the U.S. stock market," John Higgins, chief markets economist at Capital Economics, said in a note to clients.

Any number of factors can trigger selloffs and rallies. In recent weeks, investors have had to digest weak U.S. employment growth, declining forecasts for economic activity in the fourth quarter and the Federal Reserve's monetary policy meeting on Wednesday, when it suggested a rate hike is coming next month.

However, the latest bout of market turbulence also neatly coincides with polls showing Mr. Trump's chances of winning the election on Nov. 8 have been improving.

That raises the prospect of shredded trade deals and erected protectionist barriers under a Trump presidential administration, but also renewed attention on everything from manufacturing to energy technology to defence.

The S&P 500 has declined for seven straight days amid some of this recalibrating, marking the benchmark index's longest losing streak in about five years. Over the seven-day stretch, it has fallen more than 2 per cent and is closing in on its lowest point since early July.

While hardly catastrophic, the decline is enough to raise the question of whether ongoing strength in Mr. Trump's campaign will deliver more turbulence over the coming week.

Economically defensive consumer staples have risen slightly, but real estate stocks have slumped 5 per cent and health care, consumer discretionary and energy stocks have fallen more than 3 per cent.

Meanwhile, the price of gold has rallied for five straight days, rising above $1,300 (U.S.) an ounce on Wednesday for the first time in a month – possibly reflecting its status as a haven investment during uncertain times.

Oil has slumped from a recent high of $50 a barrel. And among currencies, the U.S. dollar has been retreating next to the yen, euro and Chinese yuan.

For all the gyrations, though, many observers are playing down Mr. Trump's longer term threat to markets, given that bluster rarely translates into policy. Consumption accounts for about 70 per cent of U.S. economic activity, making the free-flow of international goods a necessary fuel.

Mr. Higgins, for example, believes that the British stock market reaction to Britain's decision to withdraw from the European Union offers a useful template for what follows in the United States if Mr. Trump is elected on Nov. 8.

"Our sense is that the performance of the S&P 500 would be a bit like that of the FTSE 100 in the wake of the vote for Brexit – after a lurch to the downside, a weaker currency and a lack of radical policy changes in practice would fuel a recovery," he said.

The S&P 500 could dip below 2,000 if Mr. Trump is elected, he believes, implying a further 5-per-cent retreat from its current level. However, a weaker U.S. dollar would help U.S. multinationals in the S&P 500, offsetting Mr. Trump's proposals on trade.

Analysts at Canaccord Genuity are more specific on potential winners under a Trump administration.

They believe that aerospace and defence stocks would do well, given Mr. Trump's call for an increase in the number of active military personnel, warships and fighter jets.

"Potential cost savings achieved from Trump's scaled-back protection of allies in Europe and Asia would, in our view, most likely be redirected towards the fight against ISIS, into border control, and into increased new product investment," the Canaccord analysts said in a report.

They also expect that a Trump administration would be marginally better for areas within the energy industry, following upbeat comments in support of the coal sector.

"Trump has spoken in favour of reducing regulations that have put large amounts of pressure on the coal industry. If elected, Trump could appoint an EPA Administrator who might attempt to ease emission regulations and in turn leave more coal plants in operation," the analysts said.

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