Dow Jones Looks to Be Foreshadowing Trump vs Harris Result

• A recent report looks at how the Dow Jones relates to the election.
• When the Dow is up in the weeks leading up to the election, the incumbent party usually wins.
• On the eve of Election Day, the Dow is up about 6% over the past 11 weeks.

One key metric about the Dow’s performance has told the story of most elections going back almost 100 years.

Election Day is here in the United States, and voters will soon determine who will be president. But the may have already offered some clues as to who will prevail in the race between Vice President Kamala Harris and former President Donald Trump.

A report earlier this month by financial research firm Leuthold Group detailed how the stock market has been a reliable predictor of the presidential race going back roughly 100 years.

Specifically, the Leuthold Group found that when the Dow Jones Industrial Average is up in the last 11 weeks before Election Day, the incumbent party won the White House. And when the Dow Jones was down in the last 11 weeks before Election Day, the challenging party won the race.

This gauge has proven correct in 22 of the past 24 presidential elections dating back to 1928 and the last 11 in a row going back to 1968. Will it be right again in 2024?

Dow Portends Win by Incumbent Party

As this is the day before the election, we have a full 11-week time frame to test this theory, so let’s look at where the Dow Jones is on the eve of Election Day.

As of Monday, November 4 at 10:30 a.m. ET, the Dow Jones Industrial Average stood at 41,940 – up some 11.3% year-to-date.

If you go back 11 weeks from today, the Dow Jones closed at 39,357 on Monday, August 12. So, over the last 11 weeks, the Dow has gained 6.5%, as of 10:30 a.m. on November 4.

So, unless there is a massive crash today of more than 2,500 points on the Dow, the results portend a Harris victory.

The last time the Dow was up over the last 11 weeks and the incumbent party lost was in 1968, when the Dow was up 6.5% but the Democrat, Hubert Humphrey lost to Richard Nixon, as Barron’s reported. But that was a crazy year, when the frontrunner, Robert Kennedy, was assassinated and the country was in the throes of the Vietnam War.

The only other time this predictor was off going back to 1928 was in 1956 when incumbent Republican Dwight Eisenhower won re-election over Democrat Adlai Stevenson despite the Dow being down over the last 11 weeks before the election.

In more recent history, President Joe Biden beat the incumbent Trump in 2020 as the Dow was down 1.1% in the 11 weeks before the election. In 2016, Trump beat Democrat Hillary Clinton, who was with the incumbent party, as the Dow was off 1.2% over that same time frame.

S&P 500 also indicates Harris Win

The Leuthold Group’s metric has proven to be very accurate over the years, but there is another rule of thumb involving the that has also been a reliable predictor.

Over the past 24 presidential elections, the fate of the incumbent party has been largely tied to the performance of the S&P 500 over the previous 12 weeks. If the S&P 500 is up over the final 12 weeks, the incumbent party typically wins, and if it is down over that period, the incumbent party typically loses. This has been accurate in 20 of the past 24 presidential elections.

As of November 4 at 10:30 a.m. ET, the S&P 500 is up 20.2% year-to-date, and 7.3% over the past three months – so this metric would also point to a Harris victory.

While these indicators have had a good track record over the years, they are simply estimates based on past data and are not a predictor of future results. The actual results will be determined by voters at the ballot box on November 5.

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