Updates to add recent stock activity in fifth paragraph.

Sorry investors, your post-election honeymoon is about to be over: at noon today, the Trump rally gets real.

U.S. financial markets rallied in the wake of Donald Trump's surprise victory in November on hopes the real estate magnate will bring about change on items like tax reform, deregulation and infrastructure spending. But when Trump sworn in on Friday, campaign-trail fantasy becomes governing reality, and Wall Street had better brace for what is likely to be increased volatility as uncertainty about the future of fiscal and monetary policy in the U.S. prevails.

"There are going to be lots of ups and downs and all-arounds in stocks, markets, bond markets, currency, commodity markets," said Mark Zandi, chief economist at Moody's Analytics. "Buckle in."

Larry Summers, Harvard University professor and treasury secretary in the Clinton administration, in a Financial Times op-ed Monday compared to the recent market run as a "sugar high." He warned investors to brace for what might be a "bitter comedown."

"If ever there was a time to hope for the best but plan for the worst, it is now," he wrote.

U.S. equities have soared since Trump's win. The S&P 500 and Nasdaq Composite have climbed about 130 and 370 points since Election Day, respectively, and the Dow has rallied nearly 1500 points, brushing the 20,000-mark at the start of the year.

Long-term interest rates have jumped, with 30-year Treasury yields jumping 25 basis points the day after the election alone. The dollar has strengthened as well.

But as Friday's inauguration approaches, the market run has stalled. Stocks faltered following Trump's New York City press conference last week, and signs have begun to point to the Trump rally subsiding.

The CBOE Volatility Index, or VIX, which tracks volatility, climbed for a second straight day on Thursday, suggesting investors might be preparing for a selloff once Trump takes office. The "fear index" has spiked in recent weeks as Wall Street remains uncertain on whether Trump's policies were concrete or just bluster. It has climbed about 11% this week in the runup to Trump's swearing-in.

Global markets have been affected as well.

The Mexican peso, which has been the biggest loser of any currencies since Trump's election, fell 2% on Wednesday to a record low after commerce secretary nominee Wilbur Ross said NAFTA will be the "first thing for us to deal with" at his Senate confirmation hearing.

The dollar-denominated RTS Index, which tracks the 50 biggest Russian companies traded on the Moscow Exchange, gained over $28.9 billion in market cap between Trump's election and Jan. 13, bumping the combined market cap of the exchange up to $174.9 billion, notes Fortune.

"There are a lot of questions that potentially could be answered in the next four to six weeks, and that's probably why you're seeing a lot of volatility now, because we're approaching the point where we're going to learn something about those questions," said Dartmouth economist Eric Zitzewitz.

Investors have banked on the Trump administration's promises to adopt expansionary fiscal policies, tax cuts and increased spending on infrastructure and the military, and roll back regulations, all measures it is reasonable to assume would lead to a rise in stock prices.

But they seem to have turned a blind eye to some of the less-market-friendly policies the Trump administration might seek to implement, such as protectionist trade measures and immigration clampdowns that would affect the flow of labor. "There's a set of policies that are probably bad for equity holders," said Zitzewitz.

Justin Wolfers, University of Michigan economist and senior fellow at the Brookings Institution, noted a disconnect between investors' jubilant reaction to Trump thus far and economists' more doomsday views of his policies.

"The market is being buoyant, and professional economists seem to be downright miserable about it," he said.

There are two possible explanations for the divide: either both sides are right--Trump's package will be good for the markets short term, but bad for the economy over the long haul, or one side is wrong.

"Those of us who don't put our money where our mouth is for a living feel much more depressed than folks in markets who are putting their money where their mouth is," Wolfers said. "You can decide how much you want to weight each of those."

Prior to the election, Wolfers and Zitzewitz were among a chorus of economists warning Trump's election would lead to financial mayhem. Zandi cautioned that Trump's policies if taken at face value could reap havoc and lead to a recession, but expects Congress to temper his plans significantly. He still projects that the economy will continue to perform well in the near term, but will ultimately be diminished.

The financial markets have already priced in much of what they perceive as the positives to come out of the Trump administration, leaving a lot of room for potential downsides and volatility once he is in office.

The Trump administration organization chart still needs a lot of work, and dozens of key roles are unfilled. There is disagreement within the executive branch and with Congressional Republicans as well on issues ranging from healthcare to border adjustability.

"When you actually have to write a piece of legislation, that crystalizes these differences," said Zandi. "It sends a lot of mixed signals to investors, and that means volatility."

The off-the-cuff style exhibited by Trump and some of his advisers has proven an ability to shake markets even before is swearing in.

The president-elect has sent single stocks plummeting after targeting specific companies on Twitter. His comments at last week's press conference that pharmaceutical companies are "getting away with murder" sent biotech and healthcare stocks lower.

Steve Mnuchin, his nominee for treasury secretary, spurred a 40% jump in shares of Fannie Mae (FNMA) and Freddie Mac (FMCC)  in November when he suggested he would seek to privatize the mortgage finance companies.

"When Mnuchin gets on CNBC and says we're going to privatize Fannie Mae and Freddie Mac, that has real-life implications. You saw the spread between Fannie and Freddie securities and Ginnie Mae securities widen a lot, and that affects mortgage rates," said Zandi. "That's the kind of thing that I mean when I say buckle in."

"The fear of having the wrong temperament, the wrong setup, the wrong approach to leadership. I think that fear has been confirmed every day since the election," said Wolfers.

-Joseph Woelfel contributed to this report.

If you liked this article you might like

Worst-In-Class Goldman Sachs CEO Blankfein Gets 9% Pay Raise

Worst-In-Class Goldman Sachs CEO Blankfein Gets 9% Pay Raise

House Financial Services Chairman Jeb Hensarling Won't Seek Reelection

House Financial Services Chairman Jeb Hensarling Won't Seek Reelection

Mortgage Payments Could Be Hurt by Harvey's Impact on Houston

Mortgage Payments Could Be Hurt by Harvey's Impact on Houston

Fannie Mae: 36,583 Homes it Covers are in Harvey's Path

Fannie Mae: 36,583 Homes it Covers are in Harvey's Path

Fannie Mae and Freddie Mac Would Be Privatized Under Proposed House Budget

Fannie Mae and Freddie Mac Would Be Privatized Under Proposed House Budget