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How The Markets Will React To The 2020 Election

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Multiple studies have been done on U. S. elections and the stock market. Here’s what may be in store for November.
With the barrage of news on other topics, it’s just about possible to forget there’s an U. S. election just a few months away. There have been a surprising number of studies on what elections mean for the markets. So here’s what we could expect this November.
While Trump and Biden have a host of policies, analysis of the 2016 election showed that the markets focused primarily on tax policy. Researchers analyzed which stocks moved and to what degree around the 2016 election. They found taxes were a key driver. This makes sense, of course, it’s the primary policy that is within control of lawmakers and directly impacts corporate valuation. This is because lower taxes increase earnings, upping stock valuations. Other policies will impact specific sectors, of course, such as energy and healthcare, but tax policy tends to carry the broadest market impact if 2016 is any guide.

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