How do the US presidential elections affect the markets?
The US presidential elections have global implications that affect the financial markets. Traders often consider this period as a time of volatility and opportunity.
Stock indices
Stock market indices are a quick way to trade around the U.S. presidential election. While the typical annual return for the S&P 500 is 10%, it slightly dips to 9.1% during election years due to heightened uncertainty. From 1950 to November 2023, return in election years has swung between -40% and +30%. However, the S&P 500's typical return isn't influenced by who’s in power; the return is pretty much the same independently of whether a Democrat or Republican is leading the country. Even better for markets is a divided Congress, which tends to deliver the best annual returns of 13.6%. This could be because markets prefer stability and fewer significant changes. With this information, savvy traders might use a panic sell-off and technical analysis to buy dips, given that everything else remains unchanged.
Market impact of proposed policies: Trump vs. Harris
S&P 500
Nasdaq 100
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2024 US presidential elections timeline
Deadline for major parties to submit a list of candidates to the Secretary of State in Washington
Republican presidential caucus in Iowa
Nevada Democratic primary
Republican South Carolina primary
Maine Democratic caucuses
Tennessee Democratic primary
Illinois, Michigan, Mississippi, North Carolina, Ohio, Missouri Republican primaries
Arizona, Florida Republican primaries
Alaska, Hawaii, and North Dakota Democratic primaries
Wyoming Republican primary
Puerto Rico Democratic primary
Trial for United States v. Donald Trump, Waltine Nauta, and Carlos De Oliveira set to begin
Democratic primaries in Kentucky and Oregon
Libertarian National Convention scheduled to be held in Washington, D.C.
Republican National Convention, Charlotte, North Carolina
Massachusetts nonpresidential primary
CBS Vice Presidential Debate
Fifth Republican presidential primary debate
South Carolina Democratic primary
Nevada Republican caucus
Super Tuesday
Louisiana primaries (Democrats and Republicans)
Illinois, Michigan, Mississippi, North Carolina, Ohio, Missouri Democratic primaries
Arizona, Florida Democratic primaries
Connecticut, Delaware, New York, Rhode Island, and Wisconsin Democratic and Republican primaries
Wyoming Democratic caucuses
Pennsylvania Democratic and Republican primaries
Indiana Democratic and Republican primaries
Democratic primaries in Maryland, Nebraska, and West Virginia
Idaho Democratic caucuses
Last primaries and caucuse
Democratic National Convention, Minneapolis, Minnesota
Massachusetts nonpresidential primary
General election