Markets have been bearish amid fears about the impact on budget talks and ongoing gridlock in Washington.

Investors are looking at what the election has done to Washington — and they are worried about what they see.

Tuesday’s election brought back for a second act one of the more dysfunctional political alignments in recent memory — a Democrat-controlled Senate, a GOP-led House, and President Obama.

Markets responded Wednesday with the worst trading day of the year, as concerns over striking a deal on the fiscal cliff returned to the spotlight. The Dow Jones Industrial Average dropped 313 points Wednesday, followed with another 121 point decline Thursday.