Should markets care about who run the US?

The myth of presidential market influence

​The S&P 500 has risen an average of 10.68% in years following presidential elections since 1960, closely matching its typical annual returns. This suggests election outcomes have minimal long-term market impact.

​Historical data reveals that markets tend to rise regardless of which party controls the White House. During recent administrations, the S&P 500 grew at remarkably similar rates - 13% under Obama, 14% under Trump, and 16% under Biden.

​Many investors worry about potential policy shifts affecting their portfolios. However, the market's consistent performance across different administrations indicates that corporate earnings and economic fundamentals matter more than political leadership.

​Trading online has become increasingly accessible, allowing investors to maintain their strategies regardless of electoral outcomes.

Short-term volatility versus long-term trends

​Election periods often bring temporary market turbulence. Since 1980, the S&P 500 has risen on 9 of 11 election days, though performance is split evenly when including the following day.

​Market volatility typically increases in the weeks surrounding elections as investors process potential policy changes. However, this short-term noise rarely affects long-term market trajectories.

​Share trading strategies should focus on fundamental factors rather than election cycles. Companies continue to innovate and grow regardless of political leadership.

​Understanding market fundamentals helps investors navigate election-related volatility while maintaining focus on long-term goals.

The power of political gridlock

​Split-party control of government often benefits markets by preventing dramatic policy changes. This governmental gridlock provides stability that supports steady economic growth.

​When power is divided between parties, radical reforms become less likely. This environment allows businesses to operate with greater certainty about future regulations and tax policies.

​Investment platforms continue to serve investors regardless of political climate, providing access to diverse market opportunities.

​Historically, markets have performed well under divided government scenarios, highlighting how political balance can support steady returns.

​Now that markets face a potential Republican ‘clean sweep’, with control of the White House, Senate and House, the outlook remains strong – research from Evercore ISI says that presidential terms with Republican control of all three leads to average annual S&P 500 returns of just over 9%.

Sector performance across administrations

​Technology sectors have consistently outperformed across different administrations, driven by innovation and earnings growth rather than political factors.

​ETF trading provides exposure to various sectors, allowing investors to benefit from long-term growth trends regardless of political leadership.

​Different sectors may face varying regulatory pressures under different administrations, but successful companies adapt and continue growing despite political changes.

​Corporate performance ultimately depends more on management execution and market conditions than presidential policies.