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MAKE GRIDLOCK GREAT AGAIN

The stock market just had its best post-midterm performance in nearly 40 years

U.S. President Donald Trump speaks during a news conference
Reuters/Jonathan Ernst
Win some, lose some.
  • Jason Karaian
By Jason Karaian

Global finance and economics editor

This article is more than 2 years old.

The president’s party almost always loses Congressional seats in US midterm elections. Stocks almost always rise after midterm elections (paywall).

And as expected, today (Nov. 7), the day after a midterm election, the president’s party lost seats and the stock market rose. In fact, today’s gain of just over 2% was the biggest day-after-midterm increase for the S&P 500 since 1982.

Some analysts think that the political gridlock that results from divided government is good for markets, and the data largely support this claim (paywall). When there is a Republican president, like Donald Trump today or Ronald Reagan back in 1982, the best outcome for stocks has come when Congress is split between Republicans and Democrats—again, like today and during Reagan’s first term.

Although the bull market in stocks has been running for a long time, politics may help prop it up for a while longer.

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