Strategas analysts have found that historical data indicates a Republican-controlled Congress results in the strongest earnings growth for the S&P 500. They observed that, on average, a Republican Congress leads to an impressive 15.5% earnings growth for the index during periods of Republican dominance.

This insight originates from Strategas’ Washington Policy team, which has compiled data showcasing equity market performance under various partisan control scenarios in Washington. Recent client inquiries prompted an analysis focused on fundamentals, revealing the superior earnings growth linked to Republican congressional control.

The Strategas report also pointed out the potential for increased market volatility as the upcoming election nears and even after it concludes. “While it is not uncommon for election years to see a pickup in volatility as the election approaches, the elevated volatility expected following the election is worth watching,” the analysts stated.

They also suggested that market concerns might be rising over the possibility of an uncertain election outcome on election night, a scenario that could significantly impact market stability.

Investors are advised to exercise caution as the election season unfolds, considering the historical performance trends associated with different partisan control configurations and the potential for heightened market volatility.