As we go into election day, investors are wondering—and anxious—about the way the U.S. presidential election will change the financial markets. It’s important to keep in mind this season, particularly, the election isn’t the sole market driver, as well as the most important one. “Clearly there’s going to be a market impact from this election, but some of what impacts the market will be decided by a slew of other things beyond who’s at the top of the ticket,” states Ed Mills, a Washington policy analyst with investment firm Raymond James. “Where are we with the virus? Where are we on the economy?”As the replies to these questions unfold, traders can look to history for a number of hints regarding the stock marketplace. The four-year presidential marketplace cycle is well-known on Wall Street. Throughout a presidential term, markets fared best in the fourth and third decades —election and the year preceding it. Politicians tackle harsh jobs —a tax or rate increase, state —early on but prime the pump since the election approaches.Donald Trump’s expression was anything but ordinary. Trump years three and one (2017 and 2019) far exceeding the typical price profit in the S&P 500 indicator for similar decades, moving back to Franklin Roosevelt’s semester starting in 1941 during Barack Obama’s presidency, finishing in 2016. Trump years four and two have underperformed the typical. The question is if the market’s recent upward trajectory will last long enough to deliver this election season up to ordinary or beyond.Beware of traditional wisdom that states Wall Street favors business-friendly Republicans at its helm. Since 1928, annualized total returns for the S&P 500 have shrunk 13.3% below Democrats, compared with 7.7% below Republicans, based on InvesTech Research. To get a hint about who’ll win the election, keep a close watch on market indicators. If they’re up in the 3 weeks preceding their election, the incumbent wins 87% of the time.Whoever wins will fill high positions in the Securities and Exchange Commission and the Federal Reserve, significant decisions for fiscal markets. In terms of the candidates’ policies, both party programs remain sketchy on details in components. A win by either side can mean various things for different parts of the marketplace. Here are the problems which are most likely to have the largest impact.Corporate taxes. In 2017, Trump (along with also a Republican-controlled Congress) cut corporate tax rates from 35% to 21%, spurring earnings. If he wins another term, corporate taxation rates will remain the exact same and S&P 500 earnings could jump 30% in 2021 from 2020, state Credit Suisse analysts.Biden will attempt to boost the corporate tax rate to 28%, which might decrease earnings per share at the S&P 500 by 8% to 12% in 2021, based on quotes in Northern Trust. “Any tax increase is a negative for the markets, but it’s part of a complicated ecosystem,” states Northern Trust’s chief investment officer, Katie Nixon. Biden may spur growth in certain businesses by paying the excess tax dollars on climate, healthcare and infrastructure projects, amongst others, which might offset the one-time strike of a high corporate tax rate. And a Democratic government would be robust in financial stimulus spending to encourage the market, states Mills in Raymond James.Even therefore, the effects of any tax increase could change across industries and even within them. The greatest winners of Trump’s tax reduction in 2017—financials, consumer-oriented stocks and stocks of communicating services companies, which jumped as earnings expectations climbed —endure to get dinged if tax rates climb. In the opposite end, utilities and property companies gained less from Trump’s cuts, which bodes well for all these businesses should Biden get his growth to 28%.Biden has other tax changes on his wish list that could disproportionately hit information technology and health care stocks, says Ron Graziano, head of global accounting and tax research at Credit Suisse. Those changes including a doubling of tax rates, from 10.5% to 21%, that multinational companies pay on earnings from intellectual property held or used by foreign subsidiaries.Altogether, Biden’s tax proposals could weigh heavily on the stock market, given the hit corporate profits. Firms with strong balance sheets that generate steady cash and profits “have a proven ability to manage, absorb and sidestep potential negative tax issues,” says Graziano. High-quality companies such as Home Depot, JPMorgan Chase and Nike are examples. But Biden may have to wait on tax hikes. “With a soft economy, a big initiative on higher taxes is not how I anticipate things starting off,” says Jonathan Golub, chief stock strategist at Credit Suisse.Story continuesTrade with China. Everyone wants to level the playing field with China, safeguarding the intellectual property of U.S. companies and boosting competition between nations on manufacturing and trade. Trump has taken an us-against-them approach, levying tariffs, but Biden would likely use diplomatic and political pressure to take on China by forming a united front with Europe and Japan.No matter the approach, the cold war is here to stay. “China wants to dominate global technology and we don’t want them to,” says Nixon. “There’s no answer to that dilemma.” Navigate the divide by making sure your portfolio has exposure to both China and U.S. stocks.Infrastructure. Both sides agree that infrastructure spending is needed, and the passage of any plan would be a big win for industrials and materials companies, including Caterpillar, Vulcan Materials and US Concrete.But the parties disagree on how to pay for it. Trump’s 2018 plan called for mostly private-sector funding. (He has a $1 trillion plan in the works, but funding details are still unclear.) Biden’s $2 trillion plan would be federally funded, in part by higher corporate taxes.Although repairing crumbling roads and bridges and investing in 5G wireless and rural broadband are on the to-do list of both sides, some of Biden’s initiatives—increased mass transit and a high-speed rail network—tilt toward lowering our reliance on fossil fuels. Trump’s first-term initiatives, on the other hand, have encouraged fossil-fuel production.The biggest hurdle for infrastructure initiatives is timing, given the struggling economy. The impact on growth tends to be watered down if a program takes years to play out, says Wells Fargo Investment Institute market strategist Gary Schlossberg. Lawmakers may decide to focus on initiatives that produce instant economic results.Financials. A Trump win would mean a rally in financial stocks. His campaign website catalogs dozens of regulations eased or removed across sectors, including financials, since taking office. Some moves weakened large parts of the Dodd-Frank Wall Street reform law, enacted after the 2008 financial crisis. Trump, for instance, with bipartisan support, raised the asset threshold for banks that are exempt from some federal oversight—such as stress tests that can help determine whether a bank has the capital to withstand an economic or financial crisis—from $50 billion to $250 billion.A Biden presidency would shore up the Dodd-Frank regulations again. But re-regulation isn’t new regulation. Financial services firms have the architecture to adapt. They’re “not starting from a dead stop,” says Nixon.Health care. Biden wants to expand coverage of the Affordable Care Act; Trump wants to abolish the health care law. Both positions create uncertainty that may weigh on health maintenance stock prices.One area of agreement: lowering drug prices. Trump proposed a rule last year to allow Americans to import some prescription drugs at lower prices from Canada. Biden supports lowering drug prices to match those of other nations, among other proposals.Innovative drug and medical device stocks are less vulnerable to battles over the ACA and drug prices. You’ll find examples in exchange-traded funds such as iShares US Medical Devices and SPDR S&P Biotech. Hospitals, big winners under the ACA, face the most risk with any uncertainty about the health care law.Energy and climate. If reelected, Trump would continue to strip away energy regulations and encourage fossil-fuel production. That would lift the energy industry, hobbled this year after a dispute between Saudi Arabia and Russia over limiting oil supply coincided with a pandemic-related fall in demand.A Biden administration would focus on clean energy and lower emissions standards, among other things, in the name of combating climate change. His $2 trillion clean-energy and infrastructure plan hopes to achieve an emissions-free power sector with 2035 and invest in game-changing clean-energy technologies. That bodes well for green investing strategies, particularly in renewable energy. Although our motives weren’t political, we just added Invesco WilderHill Clean Energy (symbol PBW) to that the Kiplinger ETF 20, the list of our favorite exchange-traded funds (see Find the Best ETFs for Your Goals).Sandra Block, Lisa Gerstner, Nellie S. Huang and Anne Smith contributed this story.