Clues about how this election cliffhanger will end may be hiding in an unlikely place: Your 401. As people try to make sense of the latest swings in prediction markets and dramatic shifts in the share price in former President Donald Trump’s social media company, there’s a far simpler predictor with a surprisingly strong track record. It finds that the party in the White House tends to stay in power when the US stock market rises ahead of a presidential election.
Clinton, who served as Secretary of State in the Obama administration, lost to Trump despite big leads in most October polls. And in 2020, the S&P 500 inched lower in the final months before the election. Trump ended up losing to Joe Biden. It’s worth noting that this stock market predictor has been wrong in the past, too. In 1968, an election year that bore some key similarities to 2024, the S&P 500 climbed almost 6% in the final months before the election.