Iowans were the first to vote in a race where so far former Secretary of State Hillary Clinton and billionaire Donald Trump are the front-runners. Trump is among a dozen GOP candidates and is in a close contest in Iowa with Sen. Ted Cruz. Clinton's lead rival, Sen. Bernie Sanders, has been gaining momentum among Iowa's Democrats.
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Iowa is important in that it could shape the field of candidates going forward, as could next week's New Hampshire primary. While Trump has been the lead GOP candidate, strategists have said it's not clear he can deliver votes.
"It's about momentum and expectations," said Daniel Clifton, head of policy research at Strategas. "If Trump actually can't deliver the voters then it looks like more smoke than real and his numbers go down everywhere else."
The range of ideologies among candidates spans the spectrum, with Trump and Cruz appealing to right wing of the GOP and Sanders, appealing to the Democratic left.
Clifton said some investors are concerned about Trump because he is viewed as a protectionist on trade and the market could breathe a sigh of relief if he falls out of first place.
Stocks ended mixed Monday, with the S&P 500 and Dow down slightly and the Nasdaq up modestly.
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"I think the macro sentiment that's building right now is you have a populist revolt that's happening, and the implication of that is you're going to have less trade, possibly higher taxes," said Clifton.
But Trump is also viewed positively by some because there is a perceived lack of American leadership on the world stage, and some investors believe that's one area he could improve, Clifton said.
"There's just an uncertainty to him," said Clifton. "We have no idea what he's going to do. He's brand new. He's totally unpredictable."
Some analysts say the fact that a more traditional candidate is not taking the lead on the Republican side has concerned investors.
"I don't think the markets are happy with any of the candidates," said Sam Stovall, chief U.S. equity strategist at Standard & Poor's Capital IQ. "Both Hillary and Bernie fall over themselves to say what they're going to do to Wall Street when they get elected, and other than Donald Trump, I'm not sure that any of the Republicans understand the importance of Wall Street to Main Street."
Stovall said historically, the eighth year of a presidency has not gone well for stock market returns. "Since World War II, the S&P has fallen an average 3.3 percent in the years when the incumbent president is not allowed to run or has chosen not to run," he said, adding that the market has been down half of the time in the eighth year.
Analysts say while the overall stock market may not yet be reacting to the candidates, it's clear that some sectors are. The bond market may also be seeing more of a bid as a result of the election process. "It certainly contributed to the generally uncertain outlook for this year in both the real economy as well as financial markets," said Ian Lyngen, senior Treasury strategist at CRT Capital.
"Certain sectors of the market have been influenced by the candidates, like biotech. I would think the market is discounting a Hillary win. That is what it's been doing for the past six or 12 months," said Jeffrey Mortimer, director of investment strategy at BNY Mellon Wealth Management.