August 28, 2023

How Elections Impact the Stock Market

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The history of the stock market going back to 1926 shows that returns in months when presidential elections took place don’t reflect any consistent patterns. 


Distribution of returns for Fama/French Total US Market Research Index, July 1926—December 2022 

How Elections Impact the Stock Market
Figure 1

This chart shows a broad-market US index, with each horizontal dash representing a month, arranged from left to right by market return in 1% increments. 

Most election months haven’t produced extreme returns in one direction or the other. 

The winning party hasn’t been a reliable driver for the direction or magnitude of market movements in election months, either. 

The history of market behavior during election months makes a strong case for sticking with a plan to achieve long-term goals. 

What History Tells Us about US Presidential Elections and the Market 

It’s natural for investors to look for a connection between who wins the White House and which way stocks will go. But regardless who wins, nearly a century of returns shows that stocks have trended upward. 



Figure 2

Shareholders are investing in companies, which focus on serving their customers and growing their businesses, regardless of who is in the White House. 

US presidents may have an impact on market returns, but so do many other factors—the actions of foreign leaders, interest rate changes, changing oil prices, and technological advances, just to name a few. 

From 1926 to 2022, stocks trended higher regardless of whether Democrats or Republicans controlled the House and the Senate, or whether control was mixed. 

Stocks have rewarded disciplined investors for decades, through both Democratic and Republican presidencies. 


Past performance is not a guarantee of future results. Indices are not available for direct investment. 

In USD. Dashes representing returns for a given month are stacked in ascending order of return within each column, with highest return within that range on top. 

Figure 1: Fama/French Total US Market Research Index: July 1926–present: Fama/French Total US Market Research Factor + One-Month US Treasury Bills. Source: Ken French website. 

The Fama/French indices represent academic concepts that may be used in portfolio construction and are not available for direct investment or for use as a benchmark. Index returns are not representative of actual portfolios and do not reflect costs and fees associated with an actual investment. 

Results shown during periods prior to each index’s inception date do not represent actual returns of the respective index. Other periods selected may have different results, including losses. Backtested index performance is hypothetical and is provided for 

Figure 2: In USD. Growth of wealth shows the growth of a hypothetical investment of $1 in the securities in the S&P 500 index. S&P data © 2023 S&P Dow Jones Indices LLC, a division of S&P Global. All rights reserved. Data presented in the growth of wealth chart is hypothetical and assumes reinvestment of income and no transaction costs or taxes. The chart is for illustrative purposes only and is not indicative of any investment.