The 2024 US election is the focus of global attention. The stock market, as a barometer of the economy, often reacts quickly and sensitively to the results of the election. Investors keep a close eye on every dynamic of the election, trying to capture subtle changes in the market. Whenever a candidate's policy stance or probability of winning changes, the stock market may be turbulent. From technology stocks to energy stocks, from the US dollar to gold, the price fluctuations of various assets may become a weather vane for investors' decision-making. The uncertainty of the election results increases market volatility, which affects investors' emotions and strategies. At present, reports on the US election are emerging in an endless stream, and the results of the election are expected to be announced in November this year. So how will the results of this election affect the stock market?

Professionals have analyzed the performance of the stock market after the past 19 US presidential elections. In theory, if the ruling party has a majority in both the Senate and the House of Representatives, it will be more effective to implement policies and more likely to drive up the stock market in related industries. However, historical data shows that when the Democratic Party is in power but does not control both houses, the performance of US stocks is better. Within 6 months after the election, the cumulative return rate of US stocks can reach 15%, and after 12 months, this figure is even close to 30%. The second is when the Democratic Party controls both houses, and then the Republican Party. But it is worth noting that the overall economic conditions during each president's term are different, and historical performance does not guarantee a simple repetition in the future.

Rumors of Biden's withdrawal from the election are rife, and US stocks fluctuate sharply

After the first televised debate, doubts about whether Biden's health is sufficient to assume the responsibilities of the presidency have been rekindled. According to the Global Times on July 19, US President Biden tested positive for the new coronavirus on July 17. In addition, it is reported that Biden is currently in isolation at his home on the coast of Delaware, a result that forced him to cancel his campaign trip to Nevada originally scheduled for Wednesday.

As soon as the report came out, politicians within the Democratic Party who once supported Biden began to persuade Biden to reconsider his re-election campaign under pressure from their financial backers. It is reported that Senate Majority Leader Chuck Schumer, House Minority Leader Hakeem Jeffries and former House Speaker Nancy Pelosi told Biden in individual talks last week that he should carefully consider whether to continue the campaign, otherwise he might affect other members of the party due to the defeat.

In the stock market, the Nasdaq index, which is dominated by technology stocks, rose by more than 0.7% at the opening, but then fell sharply by more than 0.9%, falling below the 18,000 mark; the S&P 500 index also turned from rising to falling, falling by more than 0.5%; the Dow Jones Industrial Average fell by more than 0.2% after rising by more than 0.4%; the Russell 2000 small-cap index fell by more than 0.3% at the opening; and the Nasdaq 100 index fell by more than 0.7%. The volatility of the market panic index VIX rose by 8.5% to 15.77 points on the same day.

Is the Republican Party more likely to win? What impact will the successful Republican Party take office have on the stock market?

After the first presidential debate, the market generally believed that the Democratic candidate Biden performed worse than the Republican candidate Trump. In addition, Biden made frequent mistakes in public interviews, and the recent assassination attempt on Trump made the presidential poll more favorable to Trump. The market generally believed that Trump's chances of winning in November were getting higher and higher, and the stock market began to fluctuate greatly with Trump's speech.

Assuming that the Republicans win the election, what impact will the Trump regime have on the current economic or industrial situation?

This requires considering several important items in the Republican Party Platform and their impact on the economy. There are significant differences between the Trump and Biden administrations in terms of energy, immigration and economic policies. Compared with the Biden administration, Trump prefers:

• Traditional energy such as oil and natural gas
• Deporting immigrants can protect the jobs of Chinese people
• Tax cuts and reduced regulation of enterprises
• Higher tariff barriers to protect domestic industries, and reduce trade deficits and consolidate manufacturing industries

Except for the friendly traditional energy policies that help reduce inflation, the rest of Trump's policies are likely to lead to worsening inflation. But on the other hand, most policies also have a positive impact on the development of the US economy. In such an environment, stocks will perform better than bonds.

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