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Traders work on the New York stock exchange floor on October 24, 2024.
Brendan McDermid | Reuters
Stocks typically rise after a presidential election – but investors should be prepared for some short-term turmoil first, history shows.
According to CNBC data, the three major benchmarks have averaged an increase between Election Day and the end of the year in presidential election years dating back to 1980. However, investors should not expect an immediate rise in the market after the polls close.
The S&P 500 after the election
| Election date | Day after | Week after that | Month later | End of the year |
|---|---|---|---|---|
| 3-11-2020 | 2.20% | 5.23% | 8.83% | 11.48% |
| 11/8/2016 | 1.11% | 1.91% | 4.98% | 4.64% |
| 11/6/2012 | -2.37% | -3.77% | -1.01% | -0.15% |
| 4-11-2008 | -5.27% | -10.62% | -15.96% | -10.19% |
| 2-11-2004 | 1.12% | 2.97% | 5.29% | 7.20% |
| 7-11-2000 | -1.58% | -3.42% | -6.17% | -7.79% |
| 11/5/1996 | 1.46% | 2.16% | 4.23% | 3.72% |
| 3-11-1992 | -0.67% | -0.31% | 2.38% | 3.76% |
| 11/8/1988 | -0.66% | -2.48% | 0.52% | 0.93% |
| 11/6/1984 | -0.73% | -2.61% | -4.49% | -1.86% |
| 4-11-1980 | 2.12% | 1.72% | 5.77% | 5.21% |
| Average | -0.30% | -0.84% | 0.40% | 1.54% |
| Median | -0.66% | -0.31% | 2.38% | 3.72% |
Source: CNBC
In fact, the three indexes all saw average declines in the session and week following those voting days. Stocks tend to recoup most or all of these losses within a month, CNBC data shows.
This means investors don’t have to anticipate an immediate hit on Wednesday or the following days.
The Dow after the election
| Election date | Day after | Week after that | Month later | End of the year |
|---|---|---|---|---|
| 3-11-2020 | 1.34% | 7.06% | 9.06% | 11.38% |
| 11/8/2016 | 1.40% | 3.22% | 6.99% | 7.80% |
| 11/6/2012 | -2.36% | -3.70% | -1.30% | -1.07% |
| 4-11-2008 | -5.05% | -9.68% | -12.98% | -8.82% |
| 2-11-2004 | 1.01% | 3.49% | 5.47% | 7.45% |
| 7-11-2000 | -0.41% | -2.48% | -3.06% | -1.51% |
| 11/5/1996 | 1.59% | 3.04% | 5.85% | 6.04% |
| 3-11-1992 | -0.91% | -0.83% | 0.74% | 1.50% |
| 11/8/1988 | -0.43% | -2.37% | 0.67% | 1.93% |
| 11/6/1984 | -0.88% | -3.02% | -5.92% | -2.62% |
| 4-11-1980 | 1.70% | 0.73% | 3.55% | 2.86% |
| Average | -0.27% | -0.41% | 0.83% | 2.27% |
| Median | -0.41% | -0.83% | 0.74% | 1.93% |
Source: CNBC
That’s especially true given the likelihood that the presidential race, considered neck-and-neck, may not happen as early as Wednesday morning. America may also have to wait for close congressional races before the final count takes place to determine which party has control of both houses.
The Nasdaq Composite after the election
| Election Day | Day after | Week after that | Month later | End of the year |
|---|---|---|---|---|
| 3-11-2020 | 3.85% | 3.52% | 10.90% | 15.48% |
| 11/8/2016 | 1.11% | 1.58% | 4.31% | 3.65% |
| 11/6/2012 | -2.48% | -4.25% | -0.75% | 0.25% |
| 4-11-2008 | -5.53% | -11.19% | -18.79% | -11.41% |
| 2-11-2004 | 0.98% | 2.95% | 8.00% | 9.61% |
| 7-11-2000 | -5.39% | -8.12% | -19.41% | -27.67% |
| 11/5/1996 | 1.34% | 2.23% | 5.78% | 5.04% |
| 3-11-1992 | 0.16% | 3.83% | 8.56% | 11.97% |
| 11/8/1988 | -0.29% | -1.77% | -0.96% | 0.67% |
| 11/6/1984 | -0.32% | -1.08% | -4.58% | -1.27% |
| 4-11-1980 | 1.49% | 0.97% | 6.75% | 4.76% |
| Average | -0.46% | -1.03% | -0.02% | 1.01% |
| Median | 0.16% | 0.97% | 4.31% | 3.65% |
Source: CNBC
The “election is now taking center stage as the next catalyst for financial markets,” said Amy Ho, executive director of strategic research at JPMorgan. “We caution that uncertainty may remain about the outcome as the timeline for certifying election results could take days for the presidential race and weeks for the House races.”
This election comes amid a strong year for stocks, pushing the broader market to record highs. With a gain of about 20%, 2024 has seen the best first ten months of a presidential election year since 1936, according to Bespoke Investment Group.