When the bankers and lawyers for Capital One and Discover were locked in tense negotiations in February over the timing for the merger of their companies, political factors loomed.
Move too quickly, three people involved in those discussions recalled, and the Biden administration could try to scuttle a tie-up that would make executives on both sides rich. Wait longer, and former President Donald J. Trump might return to office and be more amenable. The companies agreed to aim for a Dec. 31 deal completion — a date between the election and the inauguration.
Eight months later, advisers to the bank and credit card company have decided that the best time to get the deal done might be the present, said the three people, who asked for anonymity because of regulatory rules about speaking publicly. They are racing to hit the year-end deadline in part because of the fear that Mr. Trump, who recently proposed a cap on credit-card interest rates and unveiled a new cryptocurrency company to challenge what he called “slow and outdated big banks,” would look unkindly toward helping two big lenders merge.
This year’s presidential election is vexing Wall Street, where fortunes can rise and fall on the whims of Washington. With neither candidate an obvious friend to financiers, and both pledging crackdowns on bankers in their own respects, the heartbeat of the financial services industry is pulsing with anxiety.
That is, to the degree that it’s pumping at all. Since President Biden dropped out of the race, the uncertainty has only increased and newly announced acquisitions and public stock offerings — proxies for corporate optimism — have been hushed.
In interviews, bankers, lawyers and advisers who support both candidates, as well as those still undecided, listed a number of outstanding political questions that could create or wipe out fortunes. Would corporate taxes rise or fall? Would Vice President Kamala Harris’s proposals to tackle inflation crack down on profits? Which version of Mr. Trump would show up in office?
There are no straightforward answers. Ms. Harris has attracted attention from businesspeople for declaring that “I am a capitalist” and taking a more moderate stance than Mr. Biden on issues such as capital-gains taxes. Mr. Trump is animated when discussing tariffs, deregulation and an expanding list of tax cuts.
Ralph L. Schlosstein, chairman emeritus of the investment bank Evercore and a prominent figure on Wall Street for half a century, said he could scarcely remember a period of deeper financial paralysis. “What’s missing,” he said, “is real confidence about the future.”
“Right now, we have both economic and political uncertainty,” he added.
There’s more than just confidence at stake. Action is currency on Wall Street — where investment bankers collect fees at the completion of transactions — and this is turning out to be a particularly insipid stretch. In the first nine months of 2024, $558 billion worth of corporate deals were completed, the lowest total since 2003, according to the data provider Dealogic.
The investment bank JMP estimated that there would need to be a staggering $1 trillion of additional deals in this year’s final quarter to return just to the average annual pace of the past three decades.
An uncertain economic environment and high interest rates have played their part. The Biden administration has also put companies accounting for nearly half of the S&P 500’s market value under antitrust investigation, a warning to any large company pondering acquisitions.
A Capital One spokesman said that the timing of the Discover deal announcement was based on historical precedents, and that the bank was “well positioned to receive approval regardless of the outcome” of the election.
But presidential politics are in the mix, too. For instance, while Capital One’s and Discover’s advisers are trying to move quickly to get their deal done, the bankers behind the biggest announced merger of the year, ConocoPhillips’s $22.5 billion takeover of Marathon Oil, are coalescing around the opposite view, hoping to slow-walk their transaction until after the inauguration, said two advisers who were not authorized to speak publicly about the discussions.
A ConocoPhillips spokesman referred back to an Aug. 1 news release, stating that the deal is “progressing” toward completion later this year.
The companies’ advisers, however, are girding for resistance from the Biden administration’s Federal Trade Commission, and rooting for new overseers next year in Washington. That could come from either a Trump administration friendlier toward oil interests or a Harris administration in which the trustbusting Lina Khan is no longer chair of the F.T.C.
Ms. Harris, who until her ascension to the top of the Democratic ticket in July had met with corporate executives infrequently, has not said whether she would keep on Ms. Khan. The Harris campaign deferred comment to Jon Henes, Ms. Harris’s finance director during her presidential campaign in 2020, who said in a statement that the candidate “has repeatedly made it clear that she will work to foster a stable environment where companies can grow and business leaders can plan for the future.”
As for Mr. Trump, the real estate developer was not particularly well known among the well-to-do finance set before his 2016 election. Several financiers in interviews cited the seeming incongruence that he had Goldman Sachs veterans in his administration and yet pushed tariffs and trade wars loathed by the global financial elite.
“No one has any idea” what a Trump win would mean for big business, said Jonathan Jacobson, a former partner who practiced antitrust law at the powerhouse law firm Wilson Sonsini. He said that given the former president’s quick-draw tendencies — recall the role that Mr. Trump’s feelings toward CNN appeared to play in the Justice Department’s unsuccessful attempt to block AT&T’s 2017 bid for Time Warner — it was impossible for even the savviest executive to plan for “what it means for interference in their business if they don’t toe the line.”
A Trump campaign spokeswoman, Karoline Leavitt, said in a statement that “Wall Street investors, business owners and anyone with a 401(k) wants President Trump back in the White House.”
For at least one big-money transaction, any election outcome might be an improvement. In May, T-Mobile said it would acquire most of U.S. Cellular. If the $4.4 billion deal is approved by federal regulators, fees will rain down on grateful Wall Street advisers, including the banks Citi and Wells Fargo and the law firm Cravath, Swaine & Moore.
But since the announcement, Senator Elizabeth Warren, Democrat of Massachusetts, has attacked the deal, and the Federal Communications Commission has issued two requests for information that suggest it is weighing a challenge, said a deal maker involved in the negotiations who was not authorized to speak about it publicly.
“It can’t get worse than this,” the deal maker said. “It can only get better.”
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