Here's what to expect from the stock market on Election Day

Key Points:

• Historical data from Morningstar shows that U.S. stocks tend to perform better in election-year Novembers, with an average gain of 2.4%, compared to 0.9% in non-election years, possibly due to markets appreciating the resolution of uncertainty after elections.
• Despite some exceptions like the contentious 2000 and 1948 elections, the stock market generally favors elections with clear winners, as uncertainty is a key factor that markets dislike.
• Analyses from BlackRock and Fidelity indicate that while midterm election years may have weaker annual returns on average, stocks often perform strongly in the 12 months following midterms, reflecting reduced uncertainty.
• Contrary to common belief, Morningstar's research finds that stocks have historically done better under a unified federal government (1.2% monthly gains) than a divided one (0.7%), likely because a unified government enacts clearer policies.
• Potential election day chaos or disputed results could cause short-term market volatility due to uncertainty, but experts advise investors to remain calm and confident that any issues will ultimately be resolved.