The volatility tends to steady itself after election results come in, regardless of which party wins the White House, indicating markets prefer certainty.
Guerra's review shows that financial markets tend to react negatively to uncertainty, especially in the months leading up to Election Day.
Market performance is more closely correlated with the business cycle than political party control, highlighting the importance of economic conditions over election results.
Investors remain divided on the current state of the economy amid the ongoing expansion since the 2020 recession and the impact of interest rate hikes.
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