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What the stock market typically does after the U.S. election, according to history

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Traders work on the floor at the New York Stock Exchange on Oct. 24, 2024.

Brendan McDermid | Reuters

Stocks typically rise after a presidential election — but investors need to be prepared for some short-term choppiness first, history shows.

The three major benchmarks on average have seen gains between Election Day and year-end in the presidential election year going back to 1980, according to CNBC data. However, investors shouldn’t be expecting a straight shot up in the market after polls close.

The S&P 500 after the election

Election Date Day After Week After Month Later Year End
11/3/2020 2.20% 5.23% 8.83% 11.48%
11/8/2016 1.11% 1.91% 4.98% 4.64%
11/6/2012 -2.37% -3.77% -1.01% -0.15%
11/4/2008 -5.27% -10.62% -15.96% -10.19%
11/2/2004 1.12% 2.97% 5.29% 7.20%
11/7/2000 -1.58% -3.42% -6.17% -7.79%
11/5/1996 1.46% 2.16% 4.23% 3.72%
11/3/1992 -0.67% -0.31% 2.38% 3.76%
11/8/1988 -0.66% -2.48% 0.52% 0.93%
11/6/1984 -0.73% -2.61% -4.49% -1.86%
11/4/1980 2.12% 1.72% 5.77% 5.21%
Average -0.30% -0.84% 0.40% 1.54%
Median -0.66% -0.31% 2.38% 3.72%

Source: CNBC

In fact, the three indexes have all averaged declines in the session and week following those voting days. Stocks have tended to erase most or all of those losses within a month, CNBC data shows.

This means investors shouldn’t be anticipating an immediate pop on Wednesday or the next few days after.

The Dow after the election

Election Date Day After Week After Month Later Year End
11/3/2020 1.34% 7.06% 9.06% 11.38%
11/8/2016 1.40% 3.22% 6.99% 7.80%
11/6/2012 -2.36% -3.70% -1.30% -1.07%
11/4/2008 -5.05% -9.68% -12.98% -8.82%
11/2/2004 1.01% 3.49% 5.47% 7.45%
11/7/2000 -0.41% -2.48% -3.06% -1.51%
11/5/1996 1.59% 3.04% 5.85% 6.04%
11/3/1992 -0.91% -0.83% 0.74% 1.50%
11/8/1988 -0.43% -2.37% 0.67% 1.93%
11/6/1984 -0.88% -3.02% -5.92% -2.62%
11/4/1980 1.70% 0.73% 3.55% 2.86%
Average -0.27% -0.41% 0.83% 2.27%
Median -0.41% -0.83% 0.74% 1.93%

Source: CNBC

That’s especially true given the chance that the presidential race, which is considered neck-and-neck, may not be called by Wednesday morning. America may also need to wait for close Congressional races to have final counts for determining which party has control of the either house.

The Nasdaq Composite after the election

Election Day Day After Week After Month Later Year End
11/3/2020 3.85% 3.52% 10.90% 15.48%
11/8/2016 1.11% 1.58% 4.31% 3.65%
11/6/2012 -2.48% -4.25% -0.75% 0.25%
11/4/2008 -5.53% -11.19% -18.79% -11.41%
11/2/2004 0.98% 2.95% 8.00% 9.61%
11/7/2000 -5.39% -8.12% -19.41% -27.67%
11/5/1996 1.34% 2.23% 5.78% 5.04%
11/3/1992 0.16% 3.83% 8.56% 11.97%
11/8/1988 -0.29% -1.77% -0.96% 0.67%
11/6/1984 -0.32% -1.08% -4.58% -1.27%
11/4/1980 1.49% 0.97% 6.75% 4.76%
Average -0.46% -1.03% -0.02% 1.01%
Median 0.16% 0.97% 4.31% 3.65%

Source: CNBC

The “election is now center stage as the next catalyst for financial markets,” said Amy Ho, executive director of strategic research at JPMorgan. “We caution that uncertainty could linger on the outcome as the timeline for certifying election results could take days for the presidential race and weeks for the House races.”

This election comes amid a strong year for stocks that’s pushed the broader market to all-time highs. With a gain of about 20%, 2024 has seen the best first 10 months of a presidential election year since 1936, according to Bespoke Investment Group.

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Stocks making the biggest moves midday: WBD, APP, WOLF, LYFT

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Wall Street expects Trump presidency will unlock deal-making

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Attendees cheer as a broadcast of former US President and Republican presidential candidate Donald Trum speaking at his Florida election party is shown on a screen at the Nevada GOP election watch party in Las Vegas, Nevada on November 6, 2024. 

Ronda Churchill | Afp | Getty Images

Wall Street dealmakers and corporate leaders expect the flood gates to open on merger and acquisition activity after President-elect Donald Trump takes office in January.

And he’ll likely have congressional help. Trump defeated Democratic candidate Vice President Kamala Harris, and Republicans claimed a majority of the Senate in elections this week. That red wave is expected to spell loosening regulations on deal-making, with plenty of pent-up demand.

“We know kind of where the world is headed in a Trump environment because we’ve seen it before,” said Jeffrey Solomon, president of TD Cowen, on CNBC’s “Money Movers” Wednesday. “I think the regulatory environment will be much more conducive to economic growth. There will be lighter and targeted regulation.”

Solomon added that the scaled-back regulation will be focused on certain areas “of particular interest to the Trump administration,” rather than a broad based reassessment of the entire landscape.

In recent years, there has been greater scrutiny of pending deals by the Biden administration’s Department of Justice and Federal Trade Commission, headed by Chair Lina Khan. Some have pointed to that dynamic as a chilling factor on deal flow. High interest rates and soaring company valuations have contributed, too.

Khan said in September that “when you see greater scrutiny of mergers, you can see greater deterrence of illegal mergers.” Her hard line has drawn harsh criticism, but now, there’s optimism around a forthcoming FTC with a lighter hand.

“Assuming interest rates drop and you see corporate tax rates go down, the ingredients are there for a really active M&A market,” said one top dealmaker, who talked to CNBC on the condition of anonymity to speak candidly.

On Wednesday, markets rallied on the Republican presidential win, with the Dow Jones Industrial Average soaring 1,500 points to a new record high.

Sector specific

Some sectors, including financial and pharmaceutical industries in particular, are likely to get a lift under a second Trump regime, experts said.

“We could see domestic manufacturing benefit from increased tariffs as well as a growth in technology, which slowed down from a tighter antitrust environment,” said Howard Gutman, private equity strategy and coverage lead for MorganFranklin Consulting. “Additionally, we expect the aerospace and defense industry to grow as it has historically done during past Republican administrations paired with the broader geopolitical environment.”

Other industries, such as tech, may still face an uphill battle in getting deals done.

One M&A advisor, who also spoke to CNBC anonymously, noted that Trump’s disdain for Big Tech companies — historically active deal-makers — might keep them on the sidelines. On Wednesday, tech leaders took to social media to congratulate Trump.

Apparent GOP opposition to the CHIPS Act means that semiconductor consolidation might be challenging, the advisor noted, while cautioning it is still too early to know what a Trump presidency would mean. CNBC previously reported that Qualcomm recently approached Intel about a potential takeover.

“I think the simplest way to put it is more deals, less regulation with the administration having its thumb on the scale, perhaps with a willingness to pick winners and losers,” said Jonathan Miller, chief executive of Integrated Media, which specializes in digital media investments.

Regional banks, many of which recognize the need for scale, will also likely look to consolidate, said one former industry executive. That advisor noted that smaller banks had been getting gobbled up for “some time,” but that the pace and size of those acquisitions would likely ramp up under a Trump presidency.

Pharmaceutical executives are also optimistic that lighter antitrust enforcement could clear the way for deal-making, said one health-care-focused M&A advisor, who added that antitrust enforcement could have “hardly gotten worse” under either administration but now believes things will improve “meaningfully.”

Khan has taken on scores of biopharma mergers over the last four years, arguing that monopolies will stifle the development of new drugs in certain disease areas and hurt consumer choice. Biotech company Illumina last year said it would divest diagnostic test maker Grail after heated battles with the FTC and European antitrust regulators.

Also last year, the FTC blocked Sanofi’s proposed acquisition of a drug in development for Pompe disease, a genetic condition, from Maze Therapeutics. Sanofi ultimately terminated that deal.

“Whether or not Lina Khan is bounced day one is a key consideration, but even if fewer changes at the FTC take place, there is no doubt this administration — at least on paper — will be far more amicable when it comes to business combinations,” Jared Holz, Mizuho health-care equity strategist, said in an email on Wednesday.

One top dealmaker expected an M&A uptick broadly, but agreed that the financial sector and pharmaceuticals were particularly poised for a resurgence. That deal-maker also noted that with the Senate flipping, more outspoken antitrust voices like Sen. Elizabeth Warren, D-Mass., could find it more difficult to push for DOJ or FTC investigations.

Eyes on retail, media

David Zaslav at the Allen & Company Sun Valley Conference on July 9, 2024 in Sun Valley, Idaho.

David Grogan | CNBC

A Trump presidency could usher in a number of retail deals that have been hamstrung by the FTC. Kroger’s bid to take over grocery chain Albertsons could have a better chance of getting approved under Trump, as could Tapestry’s proposed acquisition of Capri.

The merger between Kroger and Albertsons is currently under review by a federal judge, while Tapestry is working to appeal a federal order that granted the FTC’s motion for a preliminary injunction against the tie-up.

“The hostile approach of the FTC to mergers and acquisitions will almost certainly be reset and replaced with a worldview that is more favorable to corporate dealmaking,” said GlobalData managing director Neil Saunders. “This does not necessarily mean that big deals like Kroger-Albertsons will be waved through, but it does mean others like Tapestry-Capri will receive a far warmer reception than they have under the Biden administration.”

Meanwhile, ongoing turmoil in the media industry has led many to consider consolidation as the next step for the sector.

Warner Bros. Discovery CEO David Zaslav on Thursday highlighted opportunities that could come up if regulations were to loosen, doubling down on comments he made earlier this year at Allen & Co.’s annual Sun Valley conference.

“We have an upcoming new administration. … It’s too early to tell, but it may offer a pace of change and opportunity for consolidation that may be quite different, that would provide a real positive and accelerated impact on this industry that’s needed,” Zaslav said on an earnings call.

Broadcast station group owner Sinclair on Wednesday echoed a similar sentiment.

“We’re very excited about the upcoming regulatory environment,” CEO Chris Ripley said during an earnings call. “It does feel like a cloud over the industry is lifting here.”

Still, the track record between the previous Trump administration and the Biden administration for media industry deals is split.

Trump’s DOJ allowed Disney to buy Fox’s assets, but then sued to block AT&T’s deal for Time Warner.

Under the Biden administration, Amazon’s $8.5 billion deal for MGM and the merger of Warner Bros. and Discovery Communications were both waved through, but a federal judge blocked the $2.2 billion sale of Simon & Schuster to Penguin Random House.

Skydance Media and Paramount Global agreed to merge earlier this year and expect to receive regulatory approval in 2025.

Watch CNBC's full interview with Jeff Solomon, TD Cowen president

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