How Political Parties in Power Influence Markets

When political questions are in the headlines, especially during election seasons or times of uncertainty, one may ask what impact the party in power has on the markets. But whether the White House and Congress are in sync or divided, and regardless of which party has majority control, markets tend to be resilient. History shows that the stock market (as represented by the S&P 500 Index)¹ has generally marched higher regardless of which party is in charge.

How Markets React When the President and Congress Represent the Same Political Party

(D) Democrat, (R) Republican, 1937−Present

					Performance (%) Following Start Date
Start	End	President	Senate	House	1 Yr	3 Yr	5 Yr	10 Yr	20 Yr
1937	1939	D - Franklin D. Roosevelt	D	D	-34.73	-5.27	-7.47	4.37	11.12
1939	1941	D - Franklin D. Roosevelt	D	D	-0.38	-7.37	3.71	7.18	13.38
1941	1943	D - Franklin D. Roosevelt	D	D	-11.59	10.11	16.81	13.25	14.66
1943	1945	D - Franklin D. Roosevelt	D	D	25.63	26.97	14.74	16.95	15.16
1945	1947	D - Harry S. Truman	D	D	36.31	9.82	10.60	17.00	14.88
1949	1951	D - Harry S. Truman	D	D	18.60	24.58	17.74	19.94	14.86
1951	1953	D - Harry S. Truman	D	D	23.97	13.21	23.76	16.08	12.06
1953	1955	R - Dwight D. Eisenhower	R	R	-0.94	25.63	13.51	13.40	11.64
1961	1963	D - John F. Kennedy	D	D	26.88	12.48	13.25	8.18	8.31
1963	1965	D - Lyndon B. Johnson	D	D	22.76	17.14	12.37	9.91	8.30
1965	1967	D - Lyndon B. Johnson	D	D	12.46	7.83	4.98	1.25	7.79
1967	1969	D - Lyndon B. Johnson	D	D	23.89	8.01	8.38	6.62	10.15
1977	1979	D - Jimmy Carter	D	D	-7.19	5.41	8.09	13.80	14.54
1979	1981	D - Jimmy Carter	D	D	18.45	14.27	17.30	16.27	17.73
1993	1995	D - Bill Clinton	D	D	10.08	15.35	20.27	9.35	8.22
2003	2005	R - George W. Bush	R	R	28.68	14.39	12.83	7.10	9.80
2005	2007	R - George W. Bush	R	R	4.91	8.63	0.42	7.68	10.35
2009	2011	D - Barack Obama	D	D	26.46	14.12	17.94	13.12
2017	2019	R - Donald Trump	R	R	21.83	15.28	18.48
2021	2023	D - Joe Biden	D	D	28.71	10.01	14.43
2025	2027	R - Donald Trump	R	R	17.88
Average					13.94	12.03	12.11	11.19	11.94

Past performance does not guarantee future results. Indices are unmanaged and not available for direct investment. Each Congress lasts for two years (e.g., the House became Democrat in the 2020 election and served from January 2021 to January 2023). Data starts on January 1 of the year following each November election.

Summary

	1 Yr	3 Yr	5 Yr	10 Yr	20 Yr
# Positive	16	18	19	18	17
# Negative	5	2	1	0	0
Total	21	20	20	18	17
% Positive	76%	90%	95%	100%	100%
% Negative	24%	10%	5%	0%	0%

How Markets React When the President and Congress Represent Different Political Parties

(D) Democrat, (R) Republican, 1947−2025

					Performance (%) Following Start Date
Start	End	President	Senate	House	1 Yr	3 Yr	5 Yr	10 Yr	20 Yr
1947	1949	D - Harry S. Truman	R	R	5.63	9.70	16.56	18.29	13.65
1955	1957	R - Dwight D. Eisenhower	D	D	31.41	7.70	14.90	12.79	6.86
1957	1959	R - Dwight D. Eisenhower	D	D	-10.72	12.69	12.77	9.19	7.90
1959	1961	R - Dwight D. Eisenhower	D	D	11.95	12.58	9.86	10.00	6.52
1969	1971	R - Richard Nixon	D	D	-8.40	2.82	1.99	3.16	9.52
1971	1973	R - Richard Nixon	D	D	14.22	5.06	3.22	8.45	11.14
1973	1975	R - Gerald Ford	D	D	-14.67	-4.82	-0.18	6.71	11.32
1975	1977	R - Gerald Ford	D	D	37.14	16.37	14.74	14.75	14.56
1981	1983	R - Ronald Reagan	R	D	-4.88	12.28	14.63	13.90	15.66
1983	1985	R - Ronald Reagan	R	D	22.46	19.63	16.40	16.13	12.69
1985	1987	R - Ronald Reagan	R	D	31.64	18.00	20.33	14.36	13.21
1987	1989	R - Ronald Reagan	D	D	5.18	17.32	15.35	15.28	11.80
1989	1991	R - George H.W. Bush	D	D	31.69	18.53	14.55	19.21	8.43
1991	1993	R - George H.W. Bush	D	D	30.47	15.62	16.59	17.45	9.14
1995	1997	D - Bill Clinton	R	R	37.58	31.15	28.56	12.07	9.85
1997	1999	D - Bill Clinton	R	R	33.36	27.58	10.70	8.42	7.68
1999	2001	D - Bill Clinton	R	R	21.04	-1.03	-0.57	-1.38	5.62
2001	2003	R - George W. Bush	D	R	-11.89	-4.05	0.54	1.41	7.47
2007	2009	R - George W. Bush	D	D	5.49	-5.63	-0.25	6.94
2011	2013	D - Barack Obama	D	R	2.11	16.18	12.57	13.88
2013	2015	D - Barack Obama	D	R	32.39	15.14	15.79	12.56
2015	2017	D - Barack Obama	R	R	1.38	11.41	11.70	13.10
2019	2021	R - Donald Trump	R	D	31.49	26.06	15.69
2023	2025	D - Joe Biden	D	R	26.29	23.00
Average					15.10	12.64	11.58	11.21	10.17

Summary

	1 Yr	3 Yr	5 Yr	10 Yr	20 Yr
# Positive	19	20	20	21	18
# Negative	5	4	3	1	0
Total	24	24	23	22	18
% Positive	79%	83%	87%	95%	100%
% Negative	21%	17%	13%	5%	0%

Talk to your financial professional today to help make sure your portfolio is positioned correctly regardless of what happens in Washington, D.C.

¹ S&P 500 Index is a market capitalization-weighted price index composed of 500 widely held common stocks.

Data Sources: Senate.gov, House.gov, Morningstar, and Hartford Funds.

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