Shawn Snyder

Global Investment Strategist, J.P. Morgan Wealth Management


Former President Donald Trump and President Joe Biden once again secured their respective party nominations, setting up a second election face-off this fall.

The outcome in November remains far from clear, yet this much is certain: The presidential election season is in full swing and the volume of election chatter is turned up high. The noise in the news could be distracting when you’re trying to think clearly about your investments. We’ll say it again: Markets typically tend to consider the economic backdrop as its primary driver and not election results.

But not everything in the election news cycle is just noise.

We’ve broken down investing-related election issues into those you should consider because they could impact your investments, and the ones that are just myths you can feel free to ignore.

Three ways the election may affect markets

Three ways the election may affect markets

Democratic and Republican administrations would differ in ways that could impact the markets. Here are three issues on our radar:


Former President Donald Trump has suggested the possibility, if he’s elected, of imposing a universal 10% baseline tariff on all U.S. imports from all countries, rising to 60% on all imports from China. That move would likely be met with stiff resistance. But if there is a second Trump term, investors should expect higher tariffs, which could impact the profit margins of select importers of goods, particularly Chinese goods.

Tariffs can also have a secondary effect: strengthening the currency of the country imposing them. So the U.S. dollar might also strengthen relative to other currencies under a Republican presidency, as it did in 2016, when the dollar rallied nearly 5% versus other major currencies. Note, though, that over time, this knee-jerk dollar reaction to the election faded. A second Biden term might lead to a smaller reaction in the foreign exchange markets, as the prospect of additional tariffs would be much less likely.

This graph shows the impact the last two election had on the U.S. dollar from 2016 to 2020.

Tax cuts

Another difference between candidates: Their approach to the well-known Tax Cuts and Jobs Act (2017) that lowered many Americans’ tax bill. When it expires in 2025, federal taxes would rise for most U.S. households – unless its provisions are extended. President Biden says he would extend many of the provisions for taxpayers earning under $400,000. Former President Trump says he’d extend all of them, permanently. Regardless, it will be hard for either president to enact tax legislation if the opposing party controls both or even just one chamber of Congress.

At a time of rising deficits, both candidates may struggle to find offsets for this lost tax revenue – which could push bond yields higher on concern about the deficit. (This is because a worsening federal debt outlook could lead some bond investors to demand higher compensation for taking on modestly higher default risk.)

Near-term changes in sector performance

Once election results are in, a new administration’s policy proposals could lift particular sectors – though historically this bump has faded over time. Aerospace, defense, financials and small- and mid-cap stocks often rise under Republican presidents. Healthcare and green energy stocks tend to get a boost when a Democrat leads.

An important caveat: High-impact policy proposals often depend on Congress, and adoption is more likely if the same party controls the White House and the legislature. Today, the balance of Congressional power after November looks uncertain. And even with a majority in one or both houses, market-moving policies can still confront challenges and bottlenecks.

Three myths about elections and investing

Several common myths about election years persist. We debunk the three we hear most often:

Myth 1: tocks don’t do well in election years

Election year stock returns have sometimes underperformed non-election years slightly. We looked at the S&P 500 in election versus non-election years since 1928 (as far back as we have data): Stocks returned a solid 7.5%, on average, in presidential election years, and an only slightly stronger 8% in non-election years.

Exhibit caption: Stock returns don’t tend to differ much in election years

This chart  shows the S&P 500 average annual price returns from 1928 to 2023 in an election year versus a non-election year.

To be sure, while volatility is a feature of investing in any year, election years tend to be more volatile, especially just before the vote. The uncertainty tends to make it more pronounced (some investors take some risk off the table in close elections, and then put it back to work once there is more clarity on policy). After polling results are announced and the uncertainty dissipates, stocks have tended to rally. Looking at 40 years of Election Days, stocks have been higher, on average, one year later.

This chart shows the S&P 500 price changes in the months before and after U.S. election days from 1984 to 2020.

Myth 2: Markets will go down if so-and-so wins

Here’s the reality: The economic backdrop at election time tends to matter more than the victor.

It’s true that some election years have seen bigger swings than others, but the reasons, though, were largely macroeconomic.

For instance, in 2020, COVID-19 lockdowns and re-openings impacted broad markets much more than the opposing candidates’ ideologies. Or consider 2008, when Democrat Barack Obama ran against Republican John McCain: The unfolding global financial crisis was the predominant driver, not either candidate’s view on the Iraq War or healthcare. When the market has fallen post-election, it was almost always because a recession was imminent or because (as in 2008) the economy was already in recession.

This chart shows the S& P 500 returns of from 1960 to 2020, between the election day and year end in response to economic events.

Myth 3 The Federal Reserve (Fed) won’t change policy in election years.

Reality: The Fed has not shied away from hiking or cutting rates during election years.

The Fed has shown some hesitancy about moving interest rates the two months before a November presidential vote, but for the rest of an election year, policymakers have historically done what they wanted to. Since 1956, the Fed has raised or lowered interest rates in every election year save one (2012).

The Fed is focused today on softly landing the economy without stalling growth, and it’s no small task. The pivot toward rate cuts requires careful navigation to ensure inflation continues to moderate and that growth doesn’t tip into recession.

This chart shows the change in the Fed funds rate during elections years from 1956 to 2020.

Don’t lose sight of your long-term goals

While politics can evoke strong emotions, we urge you to not lose sight of your long-term investment goals. We believe the economy will remain the market’s most important driver.

Of course, there are risks from ongoing friction points, including inflation and geopolitics. But our view is that if growth holds up, price pressures abate and the Fed embarks on a rate-easing path, ample opportunities may arise for multi-asset investors, regardless of the election.

Your J.P. Morgan Advisor is here to help you navigate the shifting landscape and create a portfolio that is built to last, through business cycles and elections.

Connect with a Wealth Advisor

Our Wealth Advisors begin by getting to know you personally. To get started, tell us about your needs and we’ll reach out to you.

Connect now



Standard and Poor’s 500 Index is a capitalization-weighted index of 500 stocks. The index is designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries.

This material is for informational purposes only, and may inform you of certain products and services offered by J.P. Morgan’s wealth management businesses, part of JPMorgan Chase & Co. (“JPM”). Products and services described, as well as associated fees, charges and interest rates, are subject to change in accordance with the applicable account agreements and may differ among geographic locations. Not all products and services are offered at all locations. If you are a person with a disability and need additional support accessing this material, please contact your J.P. Morgan team or email us at for assistance. Please read all Important Information.

Any views, strategies or products discussed in this material may not be appropriate for all individuals and are subject to risks. Investors may get back less than they invested, and past performance is not a reliable indicator of future results. Asset allocation/diversification does not guarantee a profit or protect against loss. Nothing in this material should be relied upon in isolation for the purpose of making an investment decision. You are urged to consider carefully whether the services, products, asset classes (e.g. equities, fixed income, alternative investments, commodities, etc.) or strategies discussed are suitable to your needs. You must also consider the objectives, risks, charges, and expenses associated with an investment service, product or strategy prior to making an investment decision. For this and more complete information, including discussion of your goals/situation, contact your J.P. Morgan representative.

NON-RELIANCECertain information contained in this material is believed to be reliable; however, JPM does not represent or warrant its accuracy, reliability or completeness, or accept any liability for any loss or damage (whether direct or indirect) arising out of the use of all or any part of this material. No representation or warranty should be made with regard to any computations, graphs, tables, diagrams or commentary in this material, which are provided for illustration/reference purposes only. The views, opinions, estimates and strategies expressed in this material constitute our judgment based on current market conditions and are subject to change without notice. JPM assumes no duty to update any information in this material in the event that such information changes. Views, opinions, estimates and strategies expressed herein may differ from those expressed by other areas of JPM, views expressed for other purposes or in other contexts, and this material should not be regarded as a research report. Any projected results and risks are based solely on hypothetical examples cited, and actual results and risks will vary depending on specific circumstances. Forward-looking statements should not be considered as guarantees or predictions of future events.

Nothing in this document shall be construed as giving rise to any duty of care owed to, or advisory relationship with, you or any third party. Nothing in this document shall be regarded as an offer, solicitation, recommendation or advice (whether financial, accounting, legal, tax or other) given by J.P. Morgan and/or its officers or employees, irrespective of whether or not such communication was given at your request. J.P. Morgan and its affiliates and employees do not provide tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any financial transactions.

Legal Entity and Regulatory Information.

J.P. Morgan Wealth Management is a business of JPMorgan Chase & Co., which offers investment products and services through J.P. Morgan Securities LLC (JPMS), a registered broker-dealer and investment adviser, member FINRA and SIPC. Insurance products are made available through Chase Insurance Agency, Inc. (CIA), a licensed insurance agency, doing business as Chase Insurance Agency Services, Inc. in Florida. Certain custody and other services are provided by JPMorgan Chase Bank, N.A. (JPMCB). JPMS, CIA and JPMCB are affiliated companies under the common control of JPMorgan Chase & Co. Products not available in all states.

Bank deposit accounts and related services, such as checking, savings and bank lending, are offered by JPMorgan Chase Bank, N.A. Member FDIC.

This document may provide information about the brokerage and investment advisory services provided by J.P. Morgan Securities LLC (“JPMS”). The agreements entered into with JPMS, and corresponding disclosures provided with respect to the different products and services provided by JPMS (including our Form ADV disclosure brochure, if and when applicable), contain important information about the capacity in which we will be acting. You should read them all carefully. We encourage clients to speak to their JPMS representative regarding the nature of the products and services and to ask any questions they may have about the difference between brokerage and investment advisory services, including the obligation to disclose conflicts of interests and to act in the best interests of our clients.

J.P. Morgan may hold a position for itself or our other clients which may not be consistent with the information, opinions, estimates, investment strategies or views expressed in this document.  JPMorgan Chase & Co. or its affiliates may hold a position or act as market maker in the financial instruments of any issuer discussed herein or act as an underwriter, placement agent, advisor or lender to such issuer.