Election-year spending: how markets have behaved before
Since 1980 the stock market has risen in most election years, but returns in the final two months have varied widely.
A review of the past nine presidential cycles shows the S&P 500 has gained in seven of them, with an average calendar-year return close to its long-run average. Volatility, however, tends to rise in the weeks before voting.
The political calculus
Strategists note that policy outcomes, not the identity of the winner alone, drive sector performance, and that divided government has historically been neutral to mildly positive for equities.
Analysts say the outcome will depend on how negotiators handle a short list of unresolved details. Past episodes suggest that markets react most to surprises in timing rather than to the headline decision itself, and that early reactions are often partly reversed within a few weeks.
Since 1980 the stock market has risen in most election years, but returns in the final two months have varied widely.
What changes for markets
This article is for information only and is not investment advice. Figures are illustrative and may be delayed or simulated for demonstration purposes.
For information only — not investment advice.
