Will election stocks rise? The deep impact of the US presidential election on the stock market trend

The U.S. presidential election held every four years is not only a political event but also has a profound impact on the global stock markets. So, do stocks tend to rise during elections? This question involves complex market规律 and historical data support.

Basic Cycle of U.S. Elections

The U.S. presidential election occurs every four years. The entire election process is divided into four stages: from February to June is the primary election phase, where the Democratic and Republican parties select their candidates through primaries and caucuses; from July to August, the national conventions are held to finalize the candidate list; then the general election phase begins, with voters in each state casting their ballots; finally, the winner is decided by 538 electoral votes, with over 270 votes needed to win, and the elected president is inaugurated in January of the following year.

Do Stocks Rise During Elections? What Does Historical Data Say?

According to research by U.S. bank analysts on market data since 1930, there is a relatively规律周期 pattern between elections and the stock market. The historical performance of the S&P 500 index reveals this规律:

Market performance before the election is weaker. Data shows that stock and bond markets tend to perform poorly in the year prior to a presidential election, with increased volatility during the election year itself.

The transition between new and old administrations has limited impact on the stock market. Studies find that when a new party takes office, the stock market tends to rise by about 5% on average; if the same president is re-elected, stock returns increase to 6.5%. This indicates that the identity of the candidate and party affiliation are not the key factors determining market trends—what the market truly cares about is policy certainty.

Policy adjustments are the real market drivers. Changes in policies across fiscal, monetary, market, and trade sectors have significant impacts on the real economy and stock valuations. Major policy shifts often serve as triggers for market volatility.

How Should Investors Respond to Election Cycles?

In the face of market uncertainty brought by elections, investors do not need to be overly nervous. Increased volatility does not necessarily imply negative outcomes, especially when economic fundamentals are solid.

The key is to focus on substantial policy changes rather than getting caught up in candidate and party disputes. Investors should pay attention to macro policy directions and economic fundamentals, and by understanding the volatility characteristics during election years, evaluate potential investment opportunities.

At the same time, it is important to plan long-term investment portfolios and establish robust risk management mechanisms to cope with market uncertainties. Regardless of the election outcome, clear situational judgment and prudent risk control are the guarantees for steady returns.