Finance

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

Published

4 months ago

November 4, 2024

Business Finance News

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.

Finance

BRK, HOOD, NKE, PLTR and more

Published

37 minutes ago

February 24, 2025

Business Finance News

Finance

Berkshire advances on surge in earnings, but questions linger about cash

Published

5 hours ago

February 24, 2025

Business Finance News

Warren Buffett walks the floor ahead of the Berkshire Hathaway Annual Shareholders Meeting in Omaha, Nebraska on May 3, 2024.

David A. Grogen | CNBC

Berkshire Hathaway shares got a boost after Warren Buffett’s conglomerate reported a surge in operating earnings, but shareholders who were waiting for news of what will happen to its enormous pile of cash might be disappointed.

Class A shares of the Omaha-based parent of Geico and BNSF Railway rose 1.2% premarket Monday following Berkshire’s earnings report over the weekend. Berkshire’s operating profit — earnings from the company’s wholly owned businesses — skyrocketed 71% to $14.5 billion in the fourth quarter, aided by insurance underwriting, where profits jumped 302% from the year-earlier period, to $3.4 billion.

Berkshire’s investment gains from its portfolio holdings slowed sharply, however, in the fourth quarter, to $5.2 billion from $29.1 billion in the year-earlier period. Berkshire sold more equities than it bought for a ninth consecutive quarter in the three months of last year, bringing total sale of equities to more than $134 billion in 2024. Notably, the 94-year-old investor has been aggressively shrinking Berkshire’s two largest equity holdings — Apple and Bank of America.

As a result of the selling spree, Berkshire’s gigantic cash pile grew to another record of $334.2 billion, up from $325.2 billion at the end of the third quarter.

In Buffett’s annual letter, the “Oracle of Omaha” said that raising a record amount of cash didn’t reflect a dimming of his love for buying stocks and businesses.

“Despite what some commentators currently view as an extraordinary cash position at Berkshire, the great majority of your money remains in equities,” Buffett wrote. “That preference won’t change.”

He hinted that high valuations were the reason for sitting on his hands amid a raging bull market, saying “often, nothing looks compelling.” Buffett also endorsed the ability of Greg Abek, his chosen successor, to pick equity opportunities, even comparing him to the late Charlie Munger.

Meanwhile, Berkshire’s buyback halt is still in place as the conglomerate repurchased zero shares in the fourth quarter and in the first quarter of this year, through Feb. 10.

Some investors and analysts expressed impatience with the lack of action and continued to wait for an explanation, while others have faith that Buffett’s conservative stance will pave the way for big opportunities in the next downturn.

“Shareholders should take comfort in knowing that the firm continues to be managed to survive and emerge stronger from any economic or market downturn by being in a financial position to take advantage of opportunities during a crisis,” said Bill Stone, chief investment officer at Glenview Trust Company and a Berkshire shareholder.

Berkshire is coming off a strong year, when it rallied 25.5% in 2024, outperforming the S&P 500 — its best since 2021. The stock is up more than 5% so far in 2025.