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The stock market is entering the most volatile period of the 2024 presidential election year Last Updated:
U.S. financial markets seem to be signaling an all-clear following the recession scare earlier this month, as economic data appears to pave the way for the start of interest-rate cuts by the Federal Reserve. But market analysts warn there is still no green light for the stock market as the 2024 presidential-election season gets into full swing. The historical performance during election years suggests stocks could experience a lackluster and volatile period between now and Nov. 5. History suggests September is the worst month in presidential-election years in terms of stock-market performance. The S&P 500 has delivered an average 0.8% monthly decline in that month, making September the weakest month during election years dating back to 1944, according to CFRA Research. ¡°August and September historically are two of the three worst months of an election year in terms of price return,¡± said Sam Stovall, chief investment strategist at CFRA Research. ¡°February, August and September have posted average declines [in election years] since World War II, with September being by far the worst ¡ª not only in its average decline, but also it has fallen more frequently than it has risen.¡± October, despite averaging a monthly gain of over 1% in election years, has been the most volatile month with the highest standard deviation of its monthly returns since 1944 (see table below). Standard deviation measures how widely stock prices are dispersed from the average. When stock prices go up and down frequently, standard deviation is high and thus points to a higher level of market volatility.
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