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Hope for Stocks Around Inauguration Day?

Steve LeCompte | | Posted in: Calendar Effects, Political Indicators

Guide Calendar Effects Events and cycles

Key Insight

S&P 500 average returns around inauguration days were weaker in the months before and after, mainly when the presidency changed parties (24 election-based inaugurations, 1928–2024; ±21 trading days; descriptive, not a trading test; small subsamples, 1933 sensitivity).

Do investors swing toward optimism around U.S. presidential inauguration days, focusing on future opportunities? Or, does the day remind investors of political uncertainty and conflict? To investigate, we analyze daily returns of the S&P 500 Index around inauguration day. We consider subsamples of no party change and party change. Using inauguration dates since 1928 and daily S&P 500 Index levels during 1928 through most of 2024, we find that:

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Calendar Effects guide

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Further Reading

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