The volatility leading up the the midterms is nothing special as U.S. stocks typically performed poorly ahead of the elections. From January to October in midterm years, U.S. stocks fell an average of roughly 1% while stocks in all other years gained roughly 7% in the same time frame.
Even if we end up with a Republican president and Democratic Congress, U.S. stocks shouldn’t bat an eye.
For example, in 2006, when George W. Bush held office with Nancy Pelosi and Harry Reid in both the House and Senate, respectively, U.S. stocks were flat the next day but up 9% six months later and 6.7% a year later, MarketWatch reports.
If the Republicans manage to maintain control of Congress, it would be similar to when Bush held office with Bill Frist and Dennis Hastert in Congress during 2002. The S&P 500 was up 0.9% post-election day and increased 1.2% six months later and 14.9% a year later.
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