“The big one is that the centrepiece of Donald Trump’s economic plan is, in essence, unfunded tax cuts,” he said. “With the budget deficit already at 7 per cent of GDP at a time of full employment, financing the deficit might be a problem. I think the market is still getting its head around that.”

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Miller also said there were some questions as to monetary policy under Trump.

“Trump has said he’ll let Federal Reserve chair Jerome Powell serve his term, but if he is elected, whoever he appoints to the head of the Federal Reserve board will be a minion, and essentially that means keeping interest rates low,” he said.

And with tariffs on the horizon, Miller said there was some caution from investors.

“Trump has an aggressive tariff plan, but the one thing Trump and [US President Joe] Biden agree on is tariffs,” he said. “If China is the focus of those tariffs, and Chinese growth takes a hit, there’s likely to be a knock on effect to our key commodity exports and miners. Because miners are a disproportionate portion of the Australian sharemarket, that’s going to have a bigger impact on Australia.”

AMP chief economist Shane Oliver said sharemarkets across the world had been working their way up in the past few weeks.

“Markets had a big run up that left them a bit vulnerable to a correction,” he said, noting a weakening in the US labour market, a lack of significant policy stimulus from China, and that profit-taking by investors had dragged down equities in the past week.

However, Oliver said there was also an element of political uncertainty starting to creep in.

“If it was just a regular Republican presidential nominee and a regular Democrat nominee, then markets wouldn’t be too fussed by it,” he said.

Oliver said markets were also grappling with concerns the US could move to further restrict chip sales to China, and to ramp up in tariffs.

“Trump’s proposed tariffs would have an adverse impact on the Australian sharemarket,” he said. “He’s talking about a 10 per cent tariff on all imports. We only export 4 per cent of our goods to the US, so that wouldn’t have a huge impact, but it would still affect some producers.”

Oliver said the inflation outlook and Trump’s proposed lower tax rates in the US looked to be positives for markets.

“There’s ongoing lower inflation globally, and increasing prospects for more rate cuts, which possibly signals lower inflation ahead in Australia,” he said.

BetaShares chief economist David Bassanese also said the trajectory of inflation looked to be a positive for markets.

“The good news in the US is that in the last couple of months, inflation has resumed its downwards trend,” he said. “And so, markets are becoming confident about the US being able to cut interest rates, which is really buoying global markets including Australia.”

Bassanese said a Trump victory had been priced into markets.

“The only two potential negatives would be if he stoked trade wars with China again, which might hurt some tech companies in the US and do some collateral damage to us, or a possible larger deficit under Donald Trump if he cuts taxes,” he said.

“But I think markets are, dare I say, relaxed and comfortable about the potential return of Donald Trump to the White House.”