Key Takeaways
  • The S&P 500 posted its strongest year-to-date performance through October of any year this century, despite ongoing rate and political uncertainty.
  • History shows that staying invested through election volatility consistently produces better outcomes than timing the market around political events.
  • The Fed's September rate cut — the first in over four years — provided additional tailwind for equities heading into Q4.
  • Elections typically affect long-term financial plans less than most people expect. A resilient plan is built to perform across administrations.

October 2024 was defined by pre-election uncertainty, but the broader market narrative remained surprisingly resilient. Despite the political noise and competing economic signals, the S&P 500 posted its strongest year-to-date performance through October of any year this century — a remarkable milestone that caught many forecasters off guard given the challenging interest rate environment of the prior two years.

A Resilient Market Despite the Noise

The disconnect between headline uncertainty and market performance in October was striking. Political advertising reached saturation levels, polling remained extremely tight, and investors faced genuine uncertainty about the policy direction the country would take — yet equities held firm and, in many cases, pushed higher.

This pattern is more common than many investors realize. Markets often perform well in the final months of an election year, as uncertainty — one of the things markets dislike most — begins to resolve. Regardless of which candidate is ahead, the simple act of an approaching resolution can reduce the uncertainty premium embedded in asset prices.

The Data on Elections and Markets U.S. equity bull markets have historically shown durability in election years, regardless of which party wins. The data consistently shows that staying invested through election volatility produces better long-term outcomes than attempting to time the market around political events.

The Fed's First Rate Cut in Four Years

The Fed's September rate cut — the first in over four years — provided additional tailwind for equities heading into the final quarter of 2024. The 25 basis point reduction signaled that the central bank believed inflation was sufficiently under control to begin easing policy, even if the pace of future cuts remained uncertain.

Lower short-term rates tend to improve the relative attractiveness of stocks versus cash and short-duration fixed income, and the market responded accordingly. The rate-sensitive sectors that had struggled most during the hiking cycle — real estate, utilities, and small caps — began to show renewed interest from investors anticipating a more accommodative Fed path ahead.

What Elections Mean for Your Plan

For clients wondering how election outcomes affect their long-term financial plan, the honest answer is: usually less than you'd expect. Tax policy, regulatory frameworks, and trade policy can shift at the margins — but well-constructed financial plans are designed to be resilient across administrations.

  • Avoid making significant portfolio changes based on election expectations — outcomes are uncertain and markets move fast
  • If tax law changes are a concern, work with your advisor to model scenarios rather than reacting to headlines
  • Focus on the variables you can control: savings rate, asset allocation, and expense management
  • Use market volatility as an opportunity to rebalance toward target allocations, not to exit

The Bottom Line

Our planning process is designed to be resilient across political and economic environments. If you'd like to revisit your strategy or talk through how the election outcome might affect your specific situation, we're here to help.