Donald Trump's last Republican foe, Ohio Gov. John Kasich, ended his presidential campaign Wednesday, cementing Trump's remarkable triumph as his party's presumptive nominee, while some reluctant Republicans considered how to move forward. (May 4) AP

The political ascendancy of billionaire businessman Donald Trump and his anticipated clash for the White House with Hillary Clinton is fraught with risk for Wall Street, which fears a surprise presidential win for the upstart Trump due to his unpredictability.
Yet what worries Wall Street even more is the prospect of the former first lady winning by a landslide and paving the way for the Democrats to regain full control of Congress.
For now, the stock market hasn't really reacted to the 2016 presidential race, despite a contentious primary season, punctuated by potential policy shifts by Trump on trade and immigration that could shake markets, such as picking a fight with China over trade or building a wall along the Mexican border or replacing current Federal Reserve Chair Janet Yellen. Wall Street is also facing the ongoing populist challenge from Bernie Sanders, which has kept his anti-Wall Street message in the news and extended Clinton's fight for the nomination.
"In my opinion, we haven’t seen the markets react at all," says Greg Valliere, chief strategist at Horizon Investments. "The market still has a sanguine view."

If Clinton's power is checked by Republicans, it's unlikely that the planks of her platform, which are similar to President Obama's, such as increased business regulation, boosting taxes on investments like capital gains, staying tough on banks, moving towards price controls in the drug industry, will get passed into law. 
"That's the kind of gridlock markets could live with," Valliere told USA TODAY.

The reason for the market's wait-and-see approach to Election 2016 is that Wall Street thinks the most benign outcome — one of three election scenarios — is the most likely outcome. And that is Hillary Clinton, a well-known entity not prone to surprises, is seen winning the White House, but the Republicans retaining control of the House of Representatives despite a good chance of ceding control of the Senate back to the Democrats.
"Her agenda," says Valliere, "will hit a brick wall with the GOP."
But it is the other two less-bullish election scenarios that keep Wall Street pros up at night.
One big risk is if Trump, who has been underestimated since Day 1 in the presidential race, actually takes the White House.
"Investors believe that there is more risk associated with Trump," says Andy Laperriere, head of U.S. policy research for Cornerstone Macro in Washington, D.C. He ticks off three reasons why Trump might be bearish for stocks.
The first is Trump has gone on record saying China is not playing fair in the global game of trade and, as a result, has said he will slap tariffs on Chinese imports to the U.S. Trump's more insular-looking, America-first policy could spook global investors.
"Trump could start a trade war," says Laperriere. "One area that Trump has conviction on is trade. If he were to impose a 30% or 40% tariff on Chinese goods, and put tariffs on imports from other countries like Japan and Mexico, it could have a pretty dire impact on the economy and be extremely disruptive to certain countries and sectors of the global economy."
Another thing that worries investors about Trump is his "unpredictability," and the "uncertainty about what would happen under Trump," given his thin policy record, adds Laperriere. Add in the fact that Trump has never held office and lacks what Laperriere calls "foreign policy depth," and it's clear why Wall Street has misgivings about a Trump presidency.
Trump's off-the-cuff remarks on economic matters could spook markets, adds Charles Gabriel, president of Capital Alpha Partners. "His off-putting comments could easily be misread by global investors and potentially roil our economic and national security allies."
The biggest risk, however, is Trump loses badly and causes what Gabriel refers to as a "Republican wipeout," and the Democrats gain control of the White House, the Senate and the House of Representatives.
"I think we have brewing the beginnings of swirling risks for markets," says Gabriel, adding that Wall Street's angst will rise if either Hillary Clinton looks like she will win by a landslide or if investors think Trump has a real shot at winning.