The date of voting for the US Presidential election is nearing and with this, the markets and experts around the world are keeping an eye on these elections. Actually, the impact of the US government's policy is seen on the economies of the world and what the government's policy will be can be gauged from who wins the election. At present, the picture is not clear as to who has more chances of winning among the candidates in the election race and due to this there is uncertainty in the market. Vice President and Democratic candidate Kamala Harris and former President and Republican candidate Donald Trump are in a close contest in the estimates so far. Let us take a look at what impact the results of the elections held before this have had on the US market and economy.

What do the past figures say?

If we look at the figures of the last 5 elections, the market has seen growth after the results. On the other hand, volatility prevailed before the elections. Whether the Democrats or the Republicans win the US elections, the market has remained strong in the long term. However, according to the figures, the market has given better returns on the victory of the Democrats. According to a research by the University of Chicago, the average GDP growth of the US economy during the tenure of the Democratic President has been 4.86 percent, while during the tenure of the Republican President, this average has been 1.7 percent. This research includes figures from 1927 to 2015. During this period, the equity risk premium of the US stock market has been about 11 percent higher during the tenure of the Democratic President than the tenure of the Republican President. Whereas between the years 1999 and 2015, this difference has increased to more than 17 percent. Equity risk premium is the return that is received on investing in shares more than the risk-free rate (like investing in a savings account). That is, if one person deposits money in the bank and the other person invests the same amount in the stock market, then the additional return that the second person gets compared to the first person is the risk premium. These returns have been higher during the tenure of Democratic Presidents in America. How was the market impact? In the 2020 elections, the Dow Jones Industrial Average was close to 28 thousand in early October. After the results came out, the index closed above 30 thousand for the first time in late November. The market grew amid the pandemic due to the development of the vaccine and the expectation of a relief package by the Biden government. The index grew by about 15 percent between October 2020 and March 2021. Amidst the impact of the financial crisis of 2007-08, after the victory of Democratic candidate Barack Obama, the market saw a rise of 4.08 percent on the day of the results, which was the biggest rise on any election day for the last 5 elections. What is the impact of the results? According to market experts, both Democrats and Republicans have a special stance on economic policies and by and large the market seems comfortable with the Democratic candidate. However, it is clear from the data that in the long run the market moves on the basis of its signals, so in the initial phase when the situation is unclear about the policies, the market tries to get signals from which party wins and reacts accordingly.