Number of the Day
How Presidential Elections Tilt the Stock Market, by the Numbers
The S&P 500 seems to prefer incumbents
14.4%: That’s how much the S&P 500 has gained on average in the year following an election in which the incumbent party is reelected, compared to a -1% change when a new party takes power, according to research by The Hustle and Toggle AI. The researchers studied stock market performance following presidential elections since 1964. Although they note the sample size is too small to draw strong conclusions from, there does appear to be a pattern showing that the stock market prefers to have one party remain in power for as long as possible, regardless of which party that is.
The stock market’s continued bull run has been one of Trump’s favorite signals to point to as evidence that he’s been good for the economy, even though there appears to be a large divergence between stocks and the actual economy. (What’s more, as Pete Buttigieg pointed out on Twitter in response to Fox News’ Martha MacCallum, the S&P 500 grew faster under Obama’s first term than under Trump’s.)
