What Will the Stock Market Do as Election Nears?
Despite the presidential election’s domination of the headlines, economic and inflation trends have consistently outweighed electoral outcomes in the past.


In the heart of a political showdown, as the nation edges closer to the 2024 presidential face-off between Democratic Vice President Kamala Harris and her Republican challenger, former President Donald Trump, a different kind of battleground is quietly brewing — the financial markets. Investors are aligning their sights not just on the political horizon, but on the ripples the election might send through the economic landscape.
As the election season dominates headlines and newscasts, investors may be tempted to adjust their portfolios to keep pace with the heated clashes and escalated rhetoric. But before taking any meaningful action, it’s important to view things through a historical lens to uncover layers of financial resilience that challenge the notion of election-year market volatility.
Historical stock market trends during presidential election years
The historical stock market trends during U.S. presidential election years reveal a fascinating interplay between politics and market performance, shedding light on strategic investment decisions and long-term financial planning. Since 1952, the S&P 500 has experienced an average gain of 7% during presidential election years, as reported in U.S. News & World Report.

Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Market predictions tied to election outcomes have shown a remarkable accuracy rate, with the stock market correctly predicting the presidential winner in 87% of cases since 1928, as highlighted by Forbes. A declining market prior to the election has often been an indicator of the incumbent party's defeat.
A report from BlackRock found that despite the political party in power, the stock market has maintained an average return of 11.6% during election years since 1926, slightly outperforming its overall average annual return. Interestingly, a T. Rowe Price report found that the year following a Democratic win sees an average market gain of 11.3%, compared to 6.6% after a Republican victory.
Election year volatility and investor behavior
Election years bring their own brand of market volatility, which tends to be lower on average, except in the immediate months before and after the election. Notably, the T. Rowe Price report found that market turbulence spikes if the incumbent party is expected to lose but usually stabilizes post-election.
The government's composition, whether under single-party control or a divided government, has varied impacts on market performance. While single-party dominance shows no significant correlation with market trends, according to a U.S. Bank report, a divided government has been statistically linked to market performance, providing evidence that the balance of power influences market dynamics more than the controlling party itself.
Long-term investment perspective during election cycles
Beyond the electoral cycle, economic indicators such as growth rates, interest rates, inflation and corporate earnings hold more sway over market returns than election outcomes. Therefore, while the election may cause more buzz and excitement, it is important for investors to focus on broader economic trends rather than short-term election-related noise, aligning with long-term strategic investment goals.
Historical data highlights the minimal long-term effects of elections on market performance, with the S&P 500 showing resilience and positive returns regardless of the electoral cycle. Economic and inflation trends consistently outweigh electoral outcomes, so it is wise to maintain a steady investment approach based on market fundamentals.
Investors should consider maintaining diversified strategies and avoid making hasty decisions based on short-term volatility, with long-term data reinforcing the value of adhering to a well-considered investment plan. This strategic focus on economic growth, interest rates, inflation and corporate earnings is critical to navigating the uncertainties of election cycles while pursuing long-term financial objectives. Despite the speculative fears and heightened discussions around the immediate impacts of election outcomes, the long-term influence on market performance remains marginal.
Securities and investment advisory services offered through Osaic Wealth, Inc. member FINRA/SIPC. Osaic Wealth is separately owned and other entities and/or marketing names, products or services referenced here are independent of Osaic Wealth.
Related Content
Get Kiplinger Today newsletter — free
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.

For more than 18 years, Adam Lampe has helped high net-worth-individuals, affluent families, foundations and institutions work toward their financial goals through holistic financial planning. As the CEO & Co-Founder of Mint Wealth Management, he leads all development efforts within the firm. Alongside his extensive work serving clients, Adam also teaches retirement planning courses through Lone Star College and Prairie View A&M University satellite campuses around Houston.
-
Six Ways to Pay Off High-Interest Debt (and Still Save for the Future)
Get out of debt and reach your goals sooner by starting with a well-thought-out plan.
By Kiplinger Advisor Collective
-
Vaccines Medicare Covers for Free
The U.S. is experiencing an outbreak of measles and is on track to have the most whooping cough cases since 1948; these vaccines Medicare covers for free can keep you safe.
By Donna LeValley
-
Why You Need a Trusted Contact for Your Brokerage
Your brokerage or bank needs someone to reach out to if it's concerned you're experiencing fraud or cognitive decline. That's where a trusted contact can help.
By John Waggoner
-
Four Takeaways From Filing Your Taxes to Boost Your Financial Future
Now that another tax season is in the rearview mirror for most of us, what lessons can you take from what you learned about your finances to plan for the future?
By Kate Winget
-
What Claims Adjusters Are Thinking vs What They're Saying
After a natural disaster, few of us are at our best, but here's what to keep in mind when you're interacting with your insurance company's claims adjuster.
By Karl Susman, CPCU, LUTCF, CIC, CSFP, CFS, CPIA, AAI-M, PLCS
-
Looking to Make a Job Change? How to Stand Out Like a Pro
To make a strong first impression in interviews or when networking, skip your job title and work history and use an opening gambit that highlights your talents.
By Anne deBruin Sample, CEO
-
Stock Market Today: No 'Powell Put'? No Problem
Investors, traders and speculators look beyond both another Trump post and more signs of slowing economic activity.
By David Dittman
-
How to Store Your Financial Documents the Right Way
Having mountains of financial paperwork take over your home can be frustrating. Here's how to get the mess under control while still having your essential information at your fingertips.
By Laura Gariepy
-
Don’t Get Burned: Six Summer Disasters Your Home Insurance Might Not Cover
Home insurance doesn’t cover everything. Learn which disasters require extra coverage — and how to protect your home before it’s too late.
By Jacob Wolinsky
-
First 100 Days: Trump's Impact on Your Finances
Here are some opportunities to consider regarding investing, interest rates and tax cuts as the financial landscape shifts under the new administration.
By Daniel Razvi, Esquire