Trump Vs Harris: Who Will Win The US Election? This US Stock Market Stat May Have The Answer

The electoral battle between Donald Trump and Kamala Harris seems to be a cliffhanger contest, with less than two percentage points separating the two presidential candidates in pre-poll surveys.

While psephologists are focussed on inflation, cost of living and employment trends to determine the mood of American voters, there's one economic indicator that has an uncanny history of predicting the election outcome: the US stock market.

S&P 500—the broadest Wall Street index that tracks the performance of 500 top US companies—has accurately pointed towards the winner in 20 out of 24 elections over the last century, a research showed.

Since 1928, the way the S&P 500 moved in the three-month period leading to the date of voting has predicted the winner in 83% of the US presidential elections, according to the research conducted by LPL Financial Holdings Inc.

Twelve out of 15 times, the incumbent party in control of the White House won the presidential elections if the S&P 500 traded in the positive territory for the three-month period leading up to the polling date.

On the flip side, the incumbent ruling party lost the election eight out of the nine times when the S&P 500 edged lower in that period.

Going by this trend, Harris—the Democratic nominee who aims to succeed party colleague and incumbent President Joe Biden—could be holding the edge as the S&P 500 is up by a solid 11.8% since early August.

A notable exception to this trend, however, was the 2020 election, when the then Democratic candidate Joe Biden defeated incumbent President Donald Trump despite the S&P rising by 2.3% in the 90-day period ahead of the elections.

Data Source: LPL Financial Research

Biden was the first to buck the trend in nearly four decades. This, say experts, also results from the unusual nature of the 2020 elections which were conducted months after the Covid-19 outbreak. The health scare, combined with job losses and upswing in cost of living index due to the pandemic-related curbs, had severely dented Trump's popularity before the polls.

According to pollsters, the 2024 election is also unusual as the US electorate is sharply polarised, and also due to the fact that Trump has bagged the Republican nomination despite four criminal indictments.

The dramatic exit of Biden from the White House race months before the polls, following the pressure reportedly exerted on him from within the Democrats, is considered to have rejigged the electoral equations.

An estimated 62% of the American voters see the state of US economy in a "bad" shape, according to a recent poll conducted by the Associated Press-NORC Center for Public Affairs Research. However, the exit of Biden may disassociate the Democrats from the outgoing President's economic track record, as about half of the voters view Harris "favourably", as per the survey.

The live poll tracker run by ABC News-538 sees Harris holding a grim edge with with support of 48.1% voters, whereas Trump is narrowly behind with 46.4%. The key to the outcome may be held by a slim margin of voters whom the tracker shows as undecided.