How does the stock market perform when Republicans or Democrats have control of Congress vs when it’s mixed? What are the average Although volatility is often heightened during an election year, historically, US stocks have ended the year with gains more frequently compared to non-election years.
The good news is that over the long-term, the stock market has performed well under all types of presidential administrations. Here are several charts to illustrate the stock and bond market performance by president.
U.S. Stock market performance by president (S&P 500)
Under both Democratic and Republican presidents, the stock market has generally performed well with an upward trajectory over the long-term. It’s important to keep in mind the myriad of other factors that impact stock market performance aside from who is elected as president of the United States. For example, the September 11th terrorist attacks and the 2008 Great Financial Crisis occurred under President G.W. Bush.
President Obama’s term, starting in 2009, began when stock market valuations were near the bottom and as is well documented now, the stock market went on to its longest bull market in history. The impact of policy here can be debated, but the key takeaway is the limited control any administration has and the impact unanticipated and uncontrollable events can have for or against the stock market.
Which President had the highest stock market returns?
Since 1961, Bill Clinton’s term had the highest stock market returns compared to other Presidents. Only two Presidential terms resulted in losses. As explained throughout this article, the President does not control the stock market or the economy, so context is everything.
Annualized U.S. stock market returns during presidential terms
Since 1929, only three presidents have experienced negative returns for the S&P 500 on an annualized basis over the course of their term(s). The average annualized return of the S&P 500 over a president’s term is 10.2% through 2025.
Annualized bond returns during presidential terms
The average annualized return of fixed income (bonds) over the term of a US President is 6%. As expected, the volatility in the bond market is much less than equities. Since 1977, only president Biden his tracking to have negative annualized fixed income returns over the course of their administration.
Just like the stock market, the president does not control the bond market, either. Monetary policy, interest rates, and inflation are key factors in driving bond returns. While the president has a say in shaping the Federal Reserve Board of Governors, the process involves a series of checks and balances, much like other aspects of our system.
How does the S&P 500 perform during election years and the year after?
The markets hate uncertainty more than bad news. A presidential election means the possibility for significant change. Historically, Republicans have valued lower taxes and less regulation (both of which the market likes), but as evidenced in earlier charts, that doesn’t necessarily translate to higher returns during an administration.
Investment returns during an election year are generally driven by a blend of factors. Here are some:
- Whether the incumbent president running for reelection
- Economic/geopolitical climate and expectations
- How close (and unpredictable) the election is
- Key issues of candidate and perceived threat to the stock market (e.g. higher taxes, repeal of business-friendly programs, increased regulation)
- Likelihood of one party controlling Congress after the election
Performance of U.S. stocks during election years vs the year after the election
The average equity return during an election year is 12% compared to 11% the year after the election. Although historically the S&P 500 has a higher average annual return during election years versus the year after the election, both time periods have rewarded investors with higher than average returns. Since 1928, U.S. stocks ended an election year in the red only four times. All were a result of major geopolitical or financial market events versus the election itself. Contrast this with the year following the election, and the S&P 500 experienced annual losses 10 times during the same timeframe.
Performance of U.S. bonds during election years vs the year after the election
Average bond returns the year of an election have, historically, been the same as returns the year after votes are cast at 6.9%. US fixed income seldom experiences down years (10% of the time). Since 1976, bonds have been less volatile than average in election years and the year after, with only two years of negative returns during this timeframe, both the year after the election.
S&P 500 performance around mid-year elections
Since 1970, in the 126 days leading up to mid-year elections, equity returns have trended negative. After midterms, historically, the worst case scenario has been when one party was in control of Congress heading into midterms and lost control of at least one chamber. That said, the S&P 500 averaged a 10.4% return in those situations, which is in-line with long-term averages. Overall, after midterm elections, performance for the S&P 500 has historically been sharply positive, regardless of the outcome of the election.
U.S. stock market performance during Democratic, Republican, and mixed party control of Congress
Mixed control of the House and the Senate means more roadblocks to either party’s agenda. This leads to slower change or no change at all. Since the markets are afraid of uncertainty, the status quo might be welcome news. The chart below shows how relatively infrequently there’s a mixed Congress. In either case, it’s impossible to identify any trends when zooming out and looking at the bigger picture over time, as long-term investors should. The stock market is not the economy or the White House for that matter.
How to manage your investments during an election year
Should you make changes to your asset allocation during an election year or after a new president is elected? No – it can be hard for politically-passionate investors, but it’s important not to allow personal feelings about politics interfere with your financial plan. Focusing on what you can control is key when investing for the long-term. It’s all about time in the market…not timing the market.
As illustrated in the chart below, staying invested regardless of who is in office has been the better financial move.
Past performance is not a guarantee of future results. Indices are not available for direct investment; therefore, their performance does not reflect the expenses associated with the management of an actual portfolio. This article is for generalized information only and should not be misconstrued as the rendering of personalized investment advice.
[Last reviewed May 2026]
