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How Do US Elections Impact the Stock Market?







Unpacking the Impact of US Elections on the Stock Market

The Enduring Dance Between US Elections and Market Fluctuations

When dissecting the intricate relationship between US elections and the stock market, one prevailing truth shines brightly: the S&P 500 tends to dance upwards, almost whimsically, irrespective of the inhabitant of the Oval Office.

Since the early ’60s, the S&P 500 has gallivanted through positive terrain across presidential tenures, with only Richard Nixon and George W. Bush breaking the jubilant stride in the past six decades.

An Ode to the Presidential Pendulum

Discerning observers have unearthed a captivating 4-year Presidential Cycle, where stock market meanders have historically been lackluster in a President’s initial period, only to bloom vibrantly in the latter half of their reign.

The underlying principle of this phenomenon links to the political pirouette that most Presidents engage in – early on mortgaging efforts in non-economic domains before pirouetting back to boost the economy in the quest for re-election or party prosperity.

Impacts of Congressional Constellations

Extending beyond the White House, the stock market stage also illuminates the repercussions of Congressional constellations, revealing that the choicest annualized rewards for the S&P 500 have blossomed under the celestial balance of a divided Congress.

Surveying historical footprints, it becomes apparent that the market has often sauntered with lesser exuberance during Democratic reigns over both chambers of Congress, yet overarching positive trajectories have remained steadfast regardless of the political ensemble.

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It’s indeed enlightening to observe these rhythmic patterns of history, yet the orchestra of immediate policies, global affairs, and valuation compass bearings often holds the baton, steering stock market crescendos.