Trump wins US election: What’s next for the markets?

Stock market indices are a quick way to trade around the U.S. presidential election. While the typical annual return for the S&P 500 is 10%, it slightly dips to 9.1% during election years due to heightened uncertainty. From 1950 to November 2023, return in election years has swung between -40% and +30%.  However, the S&P 500's typical return isn't influenced by who’s in power; the return is pretty much the same independently of whether a Democrat or Republican is leading the country. Even better for markets is a divided Congress, which tends to deliver the best annual returns of 13.6%. This could be because markets prefer stability and fewer significant changes. With this information, savvy traders might use a panic sell-off and technical analysis to buy dips, given that everything else remains unchanged.