Presidential Election 2024: The Stock Market Performs Best When This Political Party Controls the White House

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The S&P 500 (SNPINDEX: ^GSPC) has advanced 24% year to date. Factors contributing to that momentum include robust economic growth, accelerating earnings growth, and excitement about artificial intelligence. But there is a major inflection point on the horizon.

Americans will head to the polls on Tuesday, Nov. 5, to select the next president, and the outcome could impact the stock market for years to come. Of course, the president does not control the stock market, nor do they control the economy. But they influence both with their budget priorities and official appointments.

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So, does the S&P 500 perform better when Democrats or Republicans control the White House? Here's what investors should know.

The S&P 500's historical performance under Republican and Democratic presidents

The S&P 500 is widely regarded as the single best gauge for the entire U.S. stock market because it tracks the performance of 500 large companies that cover approximately 80% of domestic equities by market value

The chart below shows the compound annual growth rate (CAGR) of the S&P 500 during Republican presidencies dating back the index's creation in 1957. Importantly, while Dwight Eisenhower held office for an eight-year period, the chart only includes his second term.

Republican President

Years in Office

S&P 500 CAGR

Dwight Eisenhower

1957-1961

7.8%

Richard Nixon

1969-1974

(4.1%)

Gerald Ford

1974-1977

10.4%

Ronald Reagan

1981-1989

10.2%

George Bush

1989-1993

10.9%

George W. Bush

2001-2009

(6.2%)

Donald Trump

2017-2021

14.1%

Average

N/A

6.2%

Median

N/A

10.2%

Data source: YCharts, The American Presidency Project.

As shown above, the S&P 500 has returned an average of 6.2% annually and a median of 10.2% annually during Republican presidencies.

The chart below shows the S&P 500's CAGR during Democratic presidencies. Importantly, President Joe Biden will not leave office until January 2025, so the figures in the chart will change during the remaining months of his term.

Democratic President

Years in Office

S&P 500 Annual Return

John Kennedy

1961-1963

5.4%

Lyndon Johnson

1963-1969

7.6%

Jimmy Carter

1977-1981

6.3%

Bill Clinton

1993-2001

15.2%

Barack Obama

2009-2017

13.8%

Joe Biden

2021-Present

11.5%

Average

N/A

9.9%

Median

N/A

9.3%

Data source: YCharts, The American Presidency Project.