With the U.S. Presidential election set for a rematch in November, many investors are wondering how the U.S. stock market might perform in the months that follow. While predicting the future is never easy, using history as a guide can be useful for understanding how markets might react to a Biden or Trump victory.
To this end, I have written this blog post which will cover:
How U.S. stocks perform after a Presidential election Whether markets seem to favor Biden or Trump How Biden and Trump’s policies might impact your finances
Every four years we hear that “this might be the most important election of your life.” But with soaring debt, rising geopolitical instability, and continued economic uncertainty, this time they may just be right. But, before we look at how U.S. stocks might perform after a Biden or Trump victory, let’s look at how stocks tend to perform after a U.S. presidential election in general.
If you want to watch a deep dive on these issues, check out my free webinar with YCharts on Wednesday, May 22 at 2PM ET. Register here.
How Have Stocks Performed After the Election?
In the seven or so weeks following an election there can be lots of uncertainty around how the future might unfold. But, if we look at how markets actually perform after an election, they are typically pretty average. To start, let’s consider how U.S. stocks (i.e. the S&P 500) have performed from “election day” until the end of the year for each year since 1950. Note that when I say “election day” I mean from the Tuesday after the first Monday in November to year end, regardless of whether there was an actual election.
If we were to plot the performance of the S&P 500 over these 35
