Have Democrats or Republicans been better for the US stock market?

Donald Trump may not like it, but the US stock market is doing better under a Democratic president.

However, new research shows that continuing to invest, regardless of who is in the White House, will yield the greatest rewards of all.

With the US presidential race too close, broker Charles Schwab has looked at how the S&P 500 index of leading US stocks has performed when the Oval Office was red for the Republican or blue for the Democrats.

It concluded that anyone who invested $10,000 in the index since 1948, only when there was a Republican president, would have seen it grow to $312,000 today.

The same amount would be worth $1.2 million today if invested only under Democratic presidents, despite both parties having had a similar number of terms in office.

But if that money had remained invested regardless of who was in power, it would have grown to $38 million.

“From a historical perspective, investors would be better off staying in US markets regardless of which party holds the White House,” said Richard Flynn, who heads the broker’s British arm.

American presidents like to take credit when stocks do well and blame their predecessor when they plummet.

In 2020, Trump called a press conference to hail the Dow Jones summit of 30,000, calling the milestone “a sacred number.”

‘The American economy is enormous and complex. It is always difficult to directly link any legislation to economic and market outcomes,” Flynn said.

For those looking to back British companies based on whether Trump or Kamala Harris wins Tuesday’s election, broker Peel Hunt has put together a list of potential winners. Some tips for a Trump victory are:

• Wood Group – a quarter of the engineer’s revenue is in the US, mainly from oil and gas, so incentives to drill would be ‘very positive’
• Ashtead – the factory rental group makes most of its money across the pond, so would benefit from any Trump tax cuts on corporate profits
• IHG – the hotel group pays ‘a very high level of tax’ in the US and would therefore also benefit from a lower rate

Meanwhile, Peel Hunt’s stock tips for a win over Harris are:

• Ceres Power – its promotion of green energy would give the fuel cell technology group a boost in its search for US licensing partners
• ITM Power – the energy storage and clean fuel company is bidding for electrolyzer projects in the US
• Clarkson – the shipping company would avoid retaliatory tariffs that would hit global trade if Trump prevailed

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