With a large amount of anxiety and perhaps a touch of dread, the time has finally come – Election Day. And that means that within the next few hours – or possibly days – we will have chosen a new president of the United States.
Now, that’s a big deal for a lot of reasons.
But this time around, the question friends and family are asking most often is this: Does the stock market really care who wins the election?
I don’t think so.
Economically speaking, a Donald Trump presidency would likely bring more economic growth, but also higher inflation and interest rates. A Kamala Harris presidency, meanwhile, would likely bring less economic growth, but lower inflation and interest rates.
And as the historical data suggests, those gains should continue, regardless of who occupies the White House.
What 16 Years’ Worth of Market Data Reflects
We strongly believe that, no matter this election’s outcome, the AI investment megatrend will continue with vigor.
Companies like Nvidia (NVDA), Amazon (AMZN), Apple (AAPL), Alphabet (GOOG), Microsoft (MSFT), Meta (META), and more will continue to spend billions upon billions of dollars to develop new AI applications and services. That means companies across all industries should keep rapidly adopting those new AI offerings to boost productivity.
As a result, we see companies all across the country using AI to improve existing products, launch new offerings, and improve operational efficiency. That’ll drive revenues, profit margins, and profits ever higher. And, ultimately, it’ll drive stock prices higher, too.
That’s why, regardless of who wins the White House tonight, we have a bullish outlook on stocks going into 2025.
The data supports this perspective.
Just consider: Since early January 2021, when President Biden began his term in office, the S&P 500 has rallied about 54%. From January 2017 to November 2020 – the same stretch in Trump’s presidency – the S&P 500 rose about 55%. And from January 2009 to November 2012 – during Obama’s first term – the S&P 500 rose about 52%.
So… over roughly the first three years and 10 months of each of the last three presidencies… the S&P 500 rose a nearly identical amount – between 50% and 55%.
Meanwhile, during this same timeframe under Biden’s presidency, the S&P 500 also experienced one big ~20%-plus correction. The same is true of Obama’s time in office. And throughout the same stretch for Trump’s presidency, the market suffered through two big ~20%-plus declines.
So… over roughly the first three years and 10 months of each of the last three presidencies… the S&P 500 also suffered through one to two ~20%-plus corrections.
It’s the same story with ~10% pullbacks as well.
The Final Word
The S&P 500 endured one minor pullback under Biden, two under Trump, and three under Obama.
Over roughly the first three years and 10 months of each of the last three presidencies, the stock market’s performance was exceptionally similar.
About a 50% return, either one or two major ~20% corrections, as well as one, two, or three ~10% pullbacks.
The point being: For the past 16 years, Wall Street hasn’t seemed to care much who has been in the White House. As such, it likely won’t care who resides there for the next four years, either.
We’re bullish on stocks regardless of tonight’s election outcome, especially because we’re bullish on AI’s ability to continue unlocking operational efficiencies across the U.S. economy.
With that said, we’re paying close attention to tonight’s election. But either way… we’re staying bullish on AI stocks… because they’ll likely win big regardless of who achieves the presidency tonight.
That makes now a great moment to get positioned for more AI-driven gains.
Check out a few top AI stocks we’re watching closely right now.
On the date of publication, Luke Lango did not have (either directly or indirectly) any positions in the securities mentioned in this article.
P.S. You can stay up to speed with Luke’s latest market analysis by reading our Daily Notes! Check out the latest issue on your Innovation Investor or Early Stage Investor subscriber site.
