NEW YORK — Wall Street has been on a wild ride the past few months with big daily swings increasingly the norm. And one major reason is no one can figure out the 2016 election.

One day the dreaded Donald Trump is vulnerable. The next he is the all but certain Republican nominee. But then, after all, there may be a brokered convention.


Some traders and executives wonder whether Ted Cruz, currently running second to Trump in pledged delegates, might be scarier than the New York billionaire. They are hoping for a white knight to ride in and save everyone at the GOP convention in July. But if that were to happen, others respond, there could be riots on the streets of Cleveland. After all, assaults at Trump rallies pop up in the news on a near daily basis.

And it's not just craziness on the Republican side.

The rock-solid Wall Street conventional wisdom that Hillary Clinton has a lock on the Democratic nomination keeps springing leaks. Everyone thought Clinton would crush Vermont senator and self-described democratic socialist Bernie Sanders in Michigan and bring the race to a quick close. And then she lost. Clinton is still viewed as the likely nominee but what if she keeps losing big states? What if her dominance really is limited to Southern states as the Sanders campaign claims?

The result of all these questions on Wall Street is a giant spike in political uncertainty. And there is nothing markets hate more than uncertainty.

“You can clearly correlate some of the increased volatility on Wall Street to developments in the presidential campaign,” said hedge fund manager Doug Kass of Seabreeze Partners.

The 2016 campaign is not the only thing causing markets to jump all over the map. There is uncertainty over the direction of the U.S. economy, the collapse in oil prices, fear over slower growth in China and the uncertain policy path of the Federal Reserve and central banks across the globe.

But the incredibly volatile 2016 campaign — with strong populist fervor surging in both parties — leaves traders, Wall Street executives and major investors completely clueless about who might wind up in the White House in 2017 and what they might have to say and do to get there.

Even if Clinton, with her strong Wall Street ties, manages to win, some on Wall Street fear she will do so only after repudiating free trade, promising to soak the rich with new taxes and handing over veto power on the top financial jobs to Massachusetts senator and liberal firebrand Elizabeth Warren.

The result for Wall Street — and much of corporate America sitting on $1.5 trillion in unused cash — is both choppy trading and a paralyzing fear of committing to anything before the election plays itself out.

“Faced with so many unusual developments in this unprecedented primary season, markets have largely refrained from pricing specific outcomes,” said Mohamed A. El-Erian, chief economic adviser at Allianz. “This will change over the next few weeks as greater clarity pertains to what's potentially ahead.”

Trump remains the biggest source of anxiety on Wall Street. Many in the financial services industry strongly oppose his nomination, fearing his promised deportation of 11 million undocumented immigrants and protectionist trade wars with China, Japan and Mexico would spark a recession if not a full-blown depression.

But every GOP candidate Wall Street has counted on to stop Trump, beginning with former Florida Gov. Jeb Bush and now Florida Sen. Marco Rubio, has faltered badly. The next great hope, former New York Mayor Michael Bloomberg, threw up his hands and said he couldn’t possibly win and wouldn’t run. And now the second leading GOP contender, Cruz, is someone Wall Street dislikes perhaps even more than Trump.

The fear with Cruz is that he would get along with no one in Congress — not even his own party — and would not be able to deliver the things Wall Street desperately wants including tax reform, immigration reform, deficit reduction and infrastructure spending on a large scale.

“Cruz would not be on anyone’s list as an ideal candidate,” the CEO of one Wall Street bank said last week, citing the Texas senator’s record of constant conflict with colleagues in Washington. “Trump isn’t super appealing either. But the hope is that maybe his presidency would be an OK one. If he is just saying things he thinks he has to say to get the nomination and winds up governing responsibly, then maybe he’d be OK.”

The CEO added that he’d discussed Trump with other top executives in recent days. “I had this exact conversation with the head of a big financial firm and he made the case that maybe Trump doesn’t mean all the stuff he says," the CEO said. "The problem is that if Trump does mean it, it’s a total disaster for the country.”

This kind of anguished mental bargaining — maybe Trump isn’t so bad after all? Maybe he’s the devil and will kill us all? — is going on in boardrooms and on trading floors all over New York and the rest of the country as Trump racks up states and delegates and his nomination seems more likely but still uncertain.

The idea that a white knight could emerge at a brokered GOP convention — Mitt Romney, House Speaker Paul Ryan or even Wisconsin Governor Scott Walker — still has some currency among the Wall Street elite. But few view it as a likely outcome.

“Wall Street is basically pricing in Trump winning the Republican nomination, that is now the assumption,” said Kass. “But it is also assuming that Hillary Clinton eventually wins the general election.”

The prevailing view around Wall Street remains that Trump is a dangerous candidate whose policies on immigration and trade would be terrible for the economy. But Rubio's failure to catch fire and trepidation about Cruz has left bankers and traders increasingly resigned to a Trump nomination while also having no idea how Trump might govern should he win the White House.

“There is a difference between heart and mind here,” said Stephen Massocca, managing director at Wedbush Equity Management. “Wall Street’s heart is opposed to Trump but if you are a betting man you have to bet that Trump gets to the convention with the most delegates, if not the 1,237 he needs to win the nomination outright before the convention. And he has flip-flopped on so many issues maybe he gets the nomination and becomes this completely reasonable person.”

But on a near daily basis, political operatives are begging Wall Street for cash, saying Trump can still be stopped if only enough money is spent against him.

Operatives in the “stop Trump” movement, which is bankrolled in part by Wall Street money managers like billionaire Paul Singer of Elliott Management, who backs Rubio, say it is way too soon to give up hope.

They argue that Rubio could still win Florida and Ohio Gov. John Kasich could win his home state, denying Trump 165 delegates. And even if Trump manages to win both states — and he maintains a solid lead in Florida while running close to Kasich in Ohio — they say it is still possible to keep him from going into the convention in Cleveland with the nomination in hand.

“If Trump wins Ohio and Florida it probably becomes impossible for anyone else to get to 1,237 delegates before the convention but by no means does it guarantee that Trump gets to 1,237,” said Katie Packer a former Romney operative and head of the Our Principles PAC which is running millions of dollars of ads against Trump in Ohio and Florida with plans to target other states. “If other people stay in the race, it is pretty close to impossible for Trump to get to 1,237.”

People backing this strategy do not want Rubio to drop out even if he loses Florida because they would like him to continue to siphon votes from Trump and remain an option at a convention should it take several ballots to pick a nominee.

Packer and others involved in the effort to block Trump say the front-runner’s national numbers are dropping in the face of their barrage of attacks over his troubled business ventures, outsourced products and record of hiring immigrants over Americans at several ventures.

“It’s too soon to be giving up and for people to be saying, ‘Well I don’t want him but I don’t think anything will work to stop him,’” Packer said. “Maybe it won’t work. We don’t know. But until the Allied forces came in to stop the Nazis nothing had worked there either.”

The one thing keeping Wall Street from going totally crazy over the Trump phenomenon is the hope that Clinton would beat him in the fall and govern as a centrist. But each Sanders win and each Clinton lurch to the left calls even this belief into question.

“Folks will be a little torn if it’s Trump versus Hillary in the general election,” the CEO of the large bank said. “There is still a real hope that Clinton would govern more like she has behaved historically rather than how she sounds when there is a socialist screaming at her on a debate stage.”

While there is growing acceptance across Wall Street that Trump is likely to be the GOP nominee, there is significant disagreement over whether markets really reflect that view and the possibility that Trump could actually become president.

Some market experts believe the “Trump factor,” while already roiling markets, won’t really be reflected on Wall Street until he wins a couple more big primaries.

Others say a Trump-related sell-off won’t occur unless it appears Trump could actually win the White House.

“There is a lot of concern about Trump’s lack of predictability,” said Kass. “If it looks more likely that he could win, that would not be a market friendly event. Investors would have growing concerns about the possibility of recession in the U.S. and there would be much more volatility on Wall Street.”