Stock market strength boosts President Biden’s re-election hopes

• Strong stock market performance at the beginning of the year has historically favored incumbent presidential candidates seeking re-election, according to Ned Davis Research.
• This is especially true for Democrats, the company said.
• The S&P 500 is up about 8% so far in 2024.

The stock market’s strong rally in the first two months of 2024 bodes well for President Joe Biden’s chances of re-election in November.

“A strong start to the year in the stock market tends to portend an incumbent victory, especially for Democrats,” said Ed Clissold, a strategist at Ned Davis Research.

The S&P 500 index has risen nearly 8% so far this year, extending last year’s strong gains driven by continued disinflation, the prospect of Federal Reserve interest rate cuts and solid economic growth.

If all of these factors persist in the coming months, they could lead to a rise in approval ratings for Mr. Biden, who has been weighed down by a variety of issues, including rising inflation, his age and his stance on the Israeli-Hamas conflict.

Historically, the stock market typically declines at the beginning of a presidential election year, with a median decline of 1%, but when the incumbent party wins the November election, the stock market tends to start the year higher, rather than rising on average. many. loss.

“The DJIA rose a median of 2.6% in the first two months of this year if the incumbent Democratic Party continued to win, but fell 6.2% if the incumbent Democrat lost,” Clissold said.

Clissold acknowledges that two-month stock market trends are by no means the deciding factor in the presidential election, but it’s still interesting.

“A two-month window eight months before an election is the best indicator, especially given that many factors other than the stock market influence voters’ decision-making processes,” Clissold said. I can’t say,” he said.

But if the stock market is rising in the run-up to the November election, it likely means the economy is strong and consumer confidence is improving, which could ultimately lead to This could be a boost to his chances of re-election.

“From a 30,000-foot perspective, if the economic situation improves, Biden’s chances will improve,” Clissold said.