Market Volatility Across Asset Classes During U.S. Presidential and Mid-Term Elections

Corrado Botta; Rilwan Sakariyahu

doi:10.1016/j.frl.2025.107754

Market Volatility Across Asset Classes During U.S. Presidential and Mid-Term Elections

Corrado Botta, Rilwan Sakariyahu (Lead / Corresponding author)

Economics

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Abstract

Does political uncertainty around elections translate to measurable market effects? This study investigates the impact of the U.S. presidential election on market volatility across different asset classes from 1992 to 2024. Using an event study approach, we document high abnormal volatility in pre-election months and during election weeks and low abnormal volatility in pre-election weeks and election months. The effects vary substantially across asset classes and are amplified during recessions. We examine multiple election characteristics, finding significant roles for political polarization, incumbent status, party changes, election margin, and international tensions.

Original language	English
Article number	107754
Number of pages	15
Journal	Finance Research Letters
Volume	84
Early online date	15 Jun 2025
DOIs	https://doi.org/10.1016/j.frl.2025.107754
Publication status	E-pub ahead of print - 15 Jun 2025

Keywords

Stock market volatility
Presidential elections
Political uncertainty
Midterm elections
Political party

ASJC Scopus subject areas

Finance

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10.1016/j.frl.2025.107754Licence: CC BY

Final published versionFinal published version, 8.94 MBLicence: CC BY

Cite this

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abstract = "Does political uncertainty around elections translate to measurable market effects? This study investigates the impact of the U.S. presidential election on market volatility across different asset classes from 1992 to 2024. Using an event study approach, we document high abnormal volatility in pre-election months and during election weeks and low abnormal volatility in pre-election weeks and election months. The effects vary substantially across asset classes and are amplified during recessions. We examine multiple election characteristics, finding significant roles for political polarization, incumbent status, party changes, election margin, and international tensions.",

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AB - Does political uncertainty around elections translate to measurable market effects? This study investigates the impact of the U.S. presidential election on market volatility across different asset classes from 1992 to 2024. Using an event study approach, we document high abnormal volatility in pre-election months and during election weeks and low abnormal volatility in pre-election weeks and election months. The effects vary substantially across asset classes and are amplified during recessions. We examine multiple election characteristics, finding significant roles for political polarization, incumbent status, party changes, election margin, and international tensions.

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Market Volatility Across Asset Classes During U.S. Presidential and Mid-Term Elections

Abstract

Keywords

ASJC Scopus subject areas

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