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A story in charts: US elections

The US election will become an increasing focus for markets as 5 November approaches. The latest charts from Schroders’ US economist look at what to expect before and after the big event.

08/04/2024
US elections

Authors

George Brown
Senior US Economist

When the S&P 500 has risen in the three months before a US election, the incumbent president or party has tended to be re-elected. If it declines, there’s been a change. This trend is illustrated in our first chart, which shows the performance of the S&P 500 around US elections since 1928, depending on whether the incumbent is re-elected or not. The indicator hasn’t always worked, but it has an impressive track record (it was last wrong in 1980). On average, stocks were higher three months after an election, whoever won. The second chart shows that most US assets have delivered lower returns under a second-term president. Only 10-year US treasuries have bucked the trend.

US equities have been a reliable indicator of election outcomes

Performance over the prior three months has been a good guide to re-election or replacement

US Elections Chart 1

Price performance of the S&P Composite based on daily data from January 1928. Past performance is not a guide to future performance and may not be repeated.

Source: Schroders Economics Group, LSEG Datastream. 1 March 2024

Most asset classes have historically seen lower returns under a second term

Biden and Trump would both be second term presidents

US Elections Chart 2

Market returns based on daily data from January 1973. Macroeconomic indicators are based on monthly and quarterly data. Past performance is not a guide to future performance and may not be repeated.

Source: Schroders Economics Group, Intercontinental Exchange, Bureau of Labor Statistics, Bureau of Economic Analysis, LSEG Datastream. 23 February 2024

This article is issued by Cazenove Capital which is part of the Schroders Group and a trading name of Schroder & Co. Limited, 1 London Wall Place, London EC2Y 5AU. Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. 

Nothing in this document should be deemed to constitute the provision of financial, investment or other professional advice in any way. Past performance is not a guide to future performance. The value of an investment and the income from it may go down as well as up and investors may not get back the amount originally invested.

This document may include forward-looking statements that are based upon our current opinions, expectations and projections. We undertake no obligation to update or revise any forward-looking statements. Actual results could differ materially from those anticipated in the forward-looking statements.

All data contained within this document is sourced from Cazenove Capital unless otherwise stated.

Authors

George Brown
Senior US Economist

The value of your investments and the income received from them can fall as well as rise. You may not get back the amount you invested.