The US Stock Market is heading into its most volatile month during an election year.
US stock market, According to CFRA Research, since 1992, nine of the S&P 500's 11 sectors have seen growth in the fourth quarter of an election year.
While Wall Street is preparing for the most anticipated month of the year with the presidential elections, investors are questioning whether the big boom expected from the third quarter will be there in the market. The market has grown at a record pace. According to the Chief Investment Officer of CFRA Research, historically speaking, since 1945, the share market has shown a strong performance during the election years in September. The result of this increase was almost 80% in the next October, as against the general trend of only 61% in all the years.
Additionally, according to Stovall, the benchmark index has risen in the fourth quarter 80% of the time, while the S&P 500 has risen in the third quarter less than 60% of the time since 1945.
“Factors that may continue to propel this market (in the fourth quarter) include China’s recent stimulus program, the ongoing easing in U.S. inflation readings as the personal consumption expenditures (index) for August recorded another downtick in growth, and the likelihood of two more Federal Reserve interest rate cuts totaling 50 to 75 basis points,” Stovall wrote.
Election-Year Stock Market Performance Patterns in the Fourth Quarter
Investors concerned about the performance of the stock market in the last quarter of 2024 have also received a positive signal from the broadening rally in U.S. stocks, according to Stovall.
Since the S&P 500's gain in the third quarter has been "accompanied by gains in stocks of all sizes, styles, and 10 of 11 sectors," Stovall wrote, "participation remains favourable."
FactSet data indicates that out of the 11 sectors in the large-cap benchmark index, the S&P 500's utilities, real estate, and industrials sectors performed the best this quarter, with the energy sector being the only one to see quarterly losses.
Will the stock market crash more than the 2008 crisis in 2025?
A market meltdown predicted to exceed the 2008 crisis is predicted by economists for 2025
A market meltdown predicted to exceed the 2008 crisis is predicted by economists for 2025. The renowned economist and HS Dent Investment Management founder, Harry Dent, has issued a warning about an impending catastrophic collapse of the world stock market.
The 71-year-old financial expert, who is well-known for his audacious economic forecasts, hinted that a financial catastrophe of never-before-seen proportions might be approaching in an interview with Fox News.
Dent's dire prediction was made just after the world stock market finished May with strong gains, giving many investors hope that things are back to normal.
The financial expert emphasized that the so-called "everything" bubble is still intact and that a blow-up might trigger the "crash of a lifetime" when it does.
During the conversation, Dent emphasized the distinctiveness of the current economic environment by drawing comparisons to the historical market crash of 2008. He noted that the current state of affairs in the financial sector is unique since it is driven by artificial stimuli, in contrast to earlier natural booms in the 1920s.
Thinking back on how long the current bubble has lasted—more than 14 years, which is much longer than most economic bubbles last—Dent emphasized how serious the crash could be.
He projected that sometime in 2025, the effects of this crisis may outweigh those of the Great Recession of 2008–2009, with possible drops of up to 86% in the S&P and 92% in the Nasdaq.
Dent suggests that even market heavyweights like Nvidia would not escape the fall, implying that even high-flying equities could be severely damaged. Dent acknowledged the quality of firms such as Nvidia but cautioned that there could be severe reductions, potentially as much as 98%.