On the brink of Donald Trump and Kamala Harris' electoral face-off, mood on the Wall Street has got investors biting their nails. It's a simple question: What will the markets do now?
History shows that United States presidential elections tend to stir up a bit of market volatility—before and after the ballots are cast. With a few hours left before the Election Day, let's take a look at what past elections have served up on the bourses.
Before The Vote: Market Mood Swing
2008: The markets were already feeling the pain of the Great Recession, but the month leading up to Barack Obama's first win was particularly brutal. The Dow Jones lost around 4.19%, the Nasdaq 100 took a 5.98% hit, and the S&P 500 fell 6.67%. Here in India, the Nifty 50 dropped 10.4%.
2012: Obama's re-election bid came with a bit of a hiccup—The Dow dropped 4.98%, and the Nasdaq went down 7.09%. But here was the kicker: The S&P 500 climbed 4.55%, and Nifty was barely in the red (just 0.23%). It was the one election that showed a bit of optimism before the vote.
2016: The market before the Trump election vote was a bit of a mixed bag, with the Dow up by 1.42%, while the Nasdaq was down 1.4%. The S&P sat flat at 0.02%, and Nifty was down 3.18%. There was a sense of uncertainty as the markets were on the brink of a shake-up.
2020: The markets had already been through the wringer thanks to the Covid-19 pandemic, but they had started to show signs of recovery by November. The Dow was up 3.02%, while the Nasdaq and S&P were both 2.84% and 3.83% higher. The Nifty also saw a boost of 6.15%.
The Morning (A Month) After
Here's the aftermath:
2008: The party was definitely over, with the Dow falling 3.44% and the Nasdaq down 5.64%. The S&P was also down 4.96%. Over in India, the Nifty had a rough time as well, tumbling 7.25%.
2012: After Obama's re-election, markets were in a good mood. The Dow gained 1.72%, the Nasdaq rose by 1.07%, and the S&P saw a modest but positive 1.69% uptick. The Nifty, too, rallied with a 2.56% gain.
2016: Following Trump's victory, the Dow was up a whopping 6.28%, and the S&P 500 saw a 4.45% advance. The Nasdaq rose by 1.47%, and while Nifty didn't follow the same trend and was down 2.02%, the US markets were on fire.
2020: In the aftermath of Biden's win, the Dow was up 3.48%, the Nasdaq advanced 6.81%, and the S&P 500 saw a 4.27% rise. In India, the Nifty 50 was similarly upbeat, gaining 7.48%.
So, What About 2024?
Markets, ahead of the Trump-Harris showdown, saw a downturn in the month leading up to the elections, with the Dow trading 1.32% lower, the Nasdaq down 0.36%, the S&P slipping 0.67% lower and the Nifty down by a whopping 4.07%.
As we wait to see the outcome of the 2024 polls, the markets wait to see what changes take place a month after the new government is formed.
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