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A late-afternoon fade left stocks modestly lower Thursday as Wall Street closed out its first losing month since February.
The S&P 500 gave up an early gain to close 0.2% lower. The benchmark index ended August down 1.8%, though a four-day winning streak going back to last week helped chip away at the severity of the monthly decline.
The Dow Jones Industrial Average fell 0.5%, while the Nasdaq composite eked out a 0.1% gain.
Market jitters over the possibility that the Federal Reserve might have to keep interest rates higher for longer after reports showed the U.S. economy remains resilient led to the market’s pullback in August.
The central bank raised its main interest rate aggressively since 2022, to the highest level since 2001, to rein inflation back to the Fed’s target of 2%. This week, reports on job openings, consumer confidence and inflation stoked hopes that the Fed may hold rates steady at its next policy meeting in September.
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That helped limit the market’s losses for August. The S&P 500, which soared 19.5% through July, remains 17.4% higher for the year, while the tech-heavy Nasdaq is up 34.1%. The Dow is up 4.8%.
Traders work March 28 on the floor at the New York Stock Exchange.
On Thursday, the government reported that a measure of inflation the Fed closely tracks remained low in July. The personal consumption and expenditures, or PCE, report is the latest sign that price increases are cooling. PCE measured 3.3% in July, matching economists expectations. That’s down from 7% a year ago.
Bond yields fell again Thursday. The yield on the 10-year Treasury slipped to 4.10% from 4.11% late Wednesday. The yield on the 2-year Treasury, which tracks expectations for the Fed, edged lower to 4.85% from 4.88% late Wednesday.
Health care stocks and banks were among the biggest drags on the market. UnitedHealth Group fell 3%, while Elevance Health fell 3.8%.
Gains in technology stocks helped stem the S&P 500’s slide. Broadcom rose 3.4% and Intel rose 1.8%.
Software company Salesforce rose 3% after raising its profit forecast for the year. Cloud-based security company CrowdStrike jumped 9.3% after reporting strong financial results.
Dollar General was among several retailers slipping after reporting weak earnings and forecasts. It slumped 12.2% after cutting its profit forecast for the year.
All told, the S&P 500 fell 7.21 points to 4,507.66 Thursday. The Dow lost 168.33 points to 34,721.91, and the Nasdaq rose 15.66 points to 14,034.97.
Wall Street has one more big economic update this week: On Friday, the government reports employment data for August.
Markets in Europe mostly fell, while Asian markets were mixed.
The Strongest Post-Election Stock Markets in History
The Strongest Post-Election Stock Markets in History
Photo Credit: oneinchpunch / Shutterstock
The U.S. political landscape has become more polarized than ever before. In fact, a study of developed democracies around the world found that the political polarization trend in the U.S. is more dramatic than in any other country in the study. In the months prior to the 2020 election, the overwhelming majority of both Biden and Trump supporters responded that they would “be very concerned about the country’s direction” and believed that it would cause lasting harm to the U.S. if their opponent won. This amount of turmoil surrounding presidential elections not only influences Americans’ everyday decisions, but the volatility can be seen in the U.S. stock market as well.
Voter turnout is the highest it has been in 120 years
As recent presidential elections have become increasingly contentious, certain issues facing Americans are coming into focus. The economy has always been a hot-button issue for American voters, but recent inflation and stock market volatility have made it an increasingly important concern. This is especially true for Republicans, who consider the economy the most important issue facing our country.
The combination of increased political polarization alongside a rocky economy has likely contributed to the record levels of voter turnout observed in recent years. Since bottoming out at just under 52% in 1996, voter turnout has steadily risen to nearly 67% during the 2020 election cycle. This level of civic engagement has not been seen since 1900—a sign of heightened voter focus.
Stock gains tend to even out over time
Despite increasing polarization around elections, one political party does not appear to have a significantly greater impact on the stock market than another. In the short term, the post-election stock market appears to slightly favor Republicans, with six out of the nine since 1932 producing positive two-week returns. This may be due to the fact that Republicans tend to favor less government regulation in business, and are often perceived to prioritize business and economic interests.
Over time, however, there is not a clear difference in the stock market when one political party is elected over another. In fact, there have only been five out of the 23 election cycles since 1932 that produced negative returns in the four years after election day. And of the five elections with the largest market price increases during the four years after election day, three were Democratic presidents—Franklin D. Roosevelt in 1932 and Bill Clinton in 1992 and 1996. Republican presidents Dwight D. Eisenhower (1952) and Ronald Reagan (1984) round out the top five.
To determine the strongest post-election stock markets in history, researchers at U.S. Money Reserve ranked post-presidential election stock markets from 1896 to 2020 according to the percentage change in the Dow Jones Industrial Average® stock market index two weeks after each election. In the event of a tie, the presidential election with the larger percentage change from election day to inauguration day was ranked higher.
Here are the strongest post-election stock markets in history.
15. 1916 presidential election
- Stock market price change (2 weeks post-election): +2.7%
- Stock market price change (inauguration day): -11.4%
- Stock market price change (4 years post-election): -20.3%
- Elected president: Woodrow Wilson (Democratic)
- Runner-up: Charles Evans Hughes (Republican)
14. 1972 presidential election
- Stock market price change (2 weeks post-election): +2.9%
- Stock market price change (inauguration day): +4.2%
- Stock market price change (4 years post-election): -1.9%
- Elected president: Richard Nixon (Republican)
- Runner-up: George McGovern (Democratic)
13. 1952 presidential election
- Stock market price change (2 weeks post-election): +2.9%
- Stock market price change (inauguration day): +6.6%
- Stock market price change (4 years post-election): +83.3%
- Elected president: Dwight D. Eisenhower (Republican)
- Runner-up: Adlai Stevenson II (Democratic)
12. 2016 presidential election
- Stock market price change (2 weeks post-election): +4.2%
- Stock market price change (inauguration day): +8.6%
- Stock market price change (4 years post-election): +47.5%
- Elected president: Donald Trump (Republican)
- Runner-up: Hillary Clinton (Democratic)
11. 2004 presidential election
- Stock market price change (2 weeks post-election): +4.3%
- Stock market price change (inauguration day): +4.1%
- Stock market price change (4 years post-election): -7.3%
- Elected president: George W. Bush (Republican)
- Runner-up: John Kerry (Democratic)
10. 1936 presidential election
- Stock market price change (2 weeks post-election): +4.7%
- Stock market price change (inauguration day): +5.3%
- Stock market price change (4 years post-election): -23.5%
- Elected president: Franklin D. Roosevelt (Democratic)
- Runner-up: Alf Landon (Republican)
9. 1904 presidential election
- Stock market price change (2 weeks post-election): +5.4%
- Stock market price change (inauguration day): +14.7%
- Stock market price change (4 years post-election): +25.2%
- Elected president: Theodore Roosevelt (Republican)
- Runner-up: Alton B. Parker (Democratic)
8. 1908 presidential election
- Stock market price change (2 weeks post-election): +5.8%
- Stock market price change (inauguration day): -1.3%
- Stock market price change (4 years post-election): +8.9%
- Elected president: William Howard Taft (Republican)
- Runner-up: William Jennings Bryan (Democratic)
7. 1996 presidential election
- Stock market price change (2 weeks post-election): +5.9%
- Stock market price change (inauguration day): +13.3%
- Stock market price change (4 years post-election): +81.7%
- Elected president: Bill Clinton (Democratic)
- Runner-up: Bob Dole (Republican)
6. 1896 presidential election
- Stock market price change (2 weeks post-election): +6.5%
- Stock market price change (inauguration day): +1.0%
- Stock market price change (4 years post-election): +48.8%
- Elected president: William McKinley (Republican)
- Runner-up: William Jennings Bryan (Democratic)
4. 1924 presidential election
- Stock market price change (2 weeks post-election): +6.6%
- Stock market price change (inauguration day): +18.6%
- Stock market price change (4 years post-election): +147.9%
- Elected president: Calvin Coolidge (Republican)
- Runner-up: John W. Davis (Democratic)
3. 1928 presidential election
- Stock market price change (2 weeks post-election): +10.2%
- Stock market price change (inauguration day): +23.9%
- Stock market price change (4 years post-election): -74.9%
- Elected president: Herbert Hoover (Republican)
- Runner-up: Al Smith (Democratic)
2. 2020 presidential election
- Stock market price change (2 weeks post-election): +10.6%
- Stock market price change (inauguration day): +15.8%
- Stock market price change (4 years post-election): +29.8%
- Elected president: Joe Biden (Democratic)
- Runner-up: Donald Trump (Republican)
1. 1900 presidential election
- Stock market price change (2 weeks post-election): +13.4%
- Stock market price change (inauguration day): +11.0%
- Stock market price change (4 years post-election): +8.8%
- Elected president: William McKinley (Republican)
- Runner-up: William Jennings Bryan (Democratic)
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