The Dow Jones Industrial Average and the S&P 500 Index both hit new record closing highs on Wednesday, as investors priced in midterm election results with a Republican majority in the Senate. Going back to the 1930s, the eight trading days surrounding midterm elections have historically seen the best short-term returns for investors, regardless of what party is in the majority.
“The five trading days leading up to midterm elections and the three trading days after have an average 2.75 percent return going back to 1934, which has no bearing on a Republican or Democrat majority,” said Karl Snyder, chief market strategist at Garden State Securities.
The blue-chip Dow Jones Industrial Average, which measures 30 large industrial stocks, jumped 100 points to hit a record finish at 17,484.53; the S&P 500 Index ticked up 11.47 points, or 0.57 percent, to end at a record high of 2,023.57. The Nasdaq Composite edged down 2.91 points, or 0.06 percent, to finish at 4,620.72.
Even with the day's gains, some analysts say elections don't matter much to markets.
“You don’t have a solid correlation between stock market performance and a shift in power. All indicators short, intermediate and long suggest we’re going higher until we see some selling that lasts more than two weeks,” said Adam Sarhan, CEO of Sarhan Capital.
Ahead on the economic calendar, investors will be watching for Thursday’s weekly jobless claims released at 8:30 a.m. EST, followed by the Labor Department’s jobs report for October on Friday.