Do Elections Matter for Markets?

The field is now set for the US 2024 presidential elections, at least as far as the major parties are concerned. President Joe Biden will stand for re-election, while former President Donald Trump will challenge him. Several notable third-party (or “no-label”) candidates will also be on many state ballots and, as the history of US elections shows, they could prove difference-makers in November.

Our aim in this piece, however, is not to offer an assessment of which candidate is likely to emerge victorious, nor which party will hold a majority after the elections in the US Senate or House of Representatives. Rather, our aim is to offer a summary of key policy differences the major parties offer, and to draw broad conclusions about the implications of competing policy outcomes for capital markets this year and next.

Setting the stage

To begin, while we note that both major parties offer seemingly clear policy differences, neither of the presidential candidates has yet to lay out a fully formed party platform. That process typically culminates around the respective party conventions, namely in July (for the Republicans) and August (for the Democrats). Nevertheless, it is possible to highlight likely differences, including those presented in Exhibit 1.