S&P 500 and Odds of Winning U.S. Presidential Election The rising odds for Trump in prediction markets have been closely tied to an upswing in S&P 500 prices, reflecting investor sentiment that aligns with potential changes in economic policy should he win the election. Image: Morgan Stanley Research
U.S. Election Scenario Probability The likelihood of a “sweep” in the upcoming U.S. elections stands at 44%. On the other hand, a divided Congress often results in gridlock and a slower pace of policy changes, during which U.S. stocks have generally performed well. Image: BofA Global Research
S&P 500 Around U.S. Election Date The S&P 500 has a historical tendency to rise after U.S. elections, particularly when there is no recession and the government is divided, reflecting investor optimism and market stability. Image: Goldman Sachs Global Investment Research
S&P 500 YTD Returns as of the End of September in Election Years The S&P 500 has demonstrated a remarkable performance in 2024, marking the best first nine months of an election year since 1950, driven by strong corporate earnings, resilient consumer spending, and investor optimism. Image: Carson Investment Research
Elections – U.S. Voting Age Population Younger generations, specifically Millennials and Generation Z, are projected to become the new majority voting bloc in the upcoming 2024 U.S. presidential election, marking a significant generational shift in the electorate. Image: BofA Global Investment Strategy
S&P 500 Performance in Election Years While September and October may not favor investors in election years, awareness of historical trends and potential volatility can help investors navigate this period with greater effectiveness and confidence. Image: Carson Investment Research
S&P 500 Performance After >20% Pre-Election Years Following a pre-election year gain exceeding 20%, the S&P 500 index has consistently shown positive growth during the election year, with an average increase in value of 11.3% since 1950. Image: Carson Investment Research
Volatility – VIX and U.S. Election The historical trend of the VIX spiking before U.S. elections and then rapidly declining afterward can be attributed to heightened uncertainty and investor fear in the lead-up to the elections. Image: Morgan Stanley Research
Average Monthly Volatility for U.S. Election Years Since 1928 The historical pattern of the VIX rising before U.S. elections and then rapidly plunging afterward is attributed to increased uncertainty and investor fear leading up to the elections. Image: BofA US Equity & Quant Strategy
VIX Average Trend in U.S. Election Years Historical patterns suggest that the VIX tends to bottom out in mid to late August, followed by a trend of increasing volatility as the U.S. Election Day approaches, driven by heightened market uncertainty. Image: BofA Global Research