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Election patterns and S&P 500 trends: What you need to know for 2025 [Video]

The market has shown some intriguing trends around election years, and 2024 is no different. Let’s dive into the key patterns from recent elections and what they might mean for 2025.

Key election-year patterns

Historically, election years lead to increased volatility and a spike in demand one week before voting day. Similar patterns were observed in 2016 and 2020, both of which saw significant market reactions. In 2024, we’re seeing a similar bullish bar, indicating potential strength in the market.

Watch the video below for a detailed analysis in the S&P 500.

 

Historical context

  • 2016: Market rallied with a strong demand tail, closing at a high.

  • 2020: A bullish bar emerged, though not as strong as 2016.

Bullish signals for 2025

With an upward push in the S&P 500, supported by aggressive demand, the market may continue to rise. Analysts suggest holding long-term positions as the bullish structure remains intact.

Stocks to watch

  • Affirm (AFRM)

  • Upstart (UPST)

  • Roblox (RBLX)

  • Sea (SE)

  • Small-cap stocks (e.g., Russell 2000)

Short-term caution

Despite bullish signs, there is an exhaustion in demand. Some consolidation or a pullback is natural, especially for overbought assets.

Considerations

  • Watch for pullbacks before re-entering.

  • Avoid chasing high prices in crypto stocks like Coinbase and Bitcoin ETFs.

As we approach 2025, keeping an eye on these trends can help you make informed investment decisions.

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.


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