### Election 2024: A Key Indicator and Market Reactions

Recent stock market performance has reinforced a historical trend suggesting a potential win for Vice President Kamala Harris in the upcoming election. The S&P 500 experienced its most substantial pre-election gain over a three-month period since 1928, a year when Herbert Hoover emerged victorious against Al Smith but led to a market collapse in 1929.

Despite this strong stock performance, election prediction models remain evenly split between Harris and former President Donald Trump. Notably, betting markets appear more optimistic about Trump's chances, giving him a 58% chance of victory based on aggregated odds from five platforms, including Kalshi and Polymarket, as of Tuesday at 4 p.m. EST.

Examining recent presidencies, both Trump and President Joe Biden oversaw impressive stock market gains. From Election Day 2016 to Election Day 2020, the S&P 500 surged by 82%, and from Election Day 2020 to the present, it increased by 73%, according to FactSet data.

Market strategists believe that avoiding a single party's dominance across the presidency and Congress could be beneficial for stock prices. Such a political balance would likely avert profit-harming policies, such as Trump's tariffs or Harris' proposed corporate tax hikes. Historically, the S&P 500 has averaged a 1.5% gain from Election Day to the end of the calendar year over the last 10 elections, with stronger returns typically following closely contested races like the current one.