The major U.S. stock indexes ended slightly lower Monday as Wall Street looks ahead to updates on inflation and how American consumers are feeling about the economy.
The S&P 500 slipped 0.2%. The benchmark index was coming off a holiday-shortened week in the U.S. and its fourth straight winning week. The Dow Jones Industrial Average also closed 0.2% lower, while the Nasdaq composite dropped 0.1%.
All told, the S&P 500 fell 8.91 points to 4,550.43. The Dow slipped 56.68 points to 35,333.47, and the Nasdaq lost 9.83 points to 14,241.02.
Health care, communication services and industrial stocks were among the biggest drags on the market.
Technology stocks and companies that rely on consumer spending were bright spots.
People huddle outside the New York Stock Exchange on Nov. 21. Investors will get more updates on the economy this week with consumer confidence and inflation reports.
In the bond market, Treasury yields fell broadly. The yield on the 10-year Treasury, which influences interest rates on mortgages and other loans, fell to 4.39% from 4.47% late Friday. The yield on the 2-year Treasury slid to 4.88% from 4.95%.
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Investors have grown cautiously optimistic that inflation has cooled enough for the Federal Reserve to put a definitive end to its aggressive interest rate hikes. Meanwhile, the broader economy has remained strong enough in the face of rising interest rates and inflation to avoid a recession.
Markets have been rallying on that sentiment and the S&P 500 remains on track to close out November as its best month of the year. Investors will get more updates on the economy this week to help either confirm or soften that sentiment.
On Tuesday the Conference Board issues its latest report on consumer confidence, which has remained solid throughout the year. Economists polled by FactSet expect another solid reading for the October report.
The price of U.S. crude oil fell 0.9% Monday, remaining mostly stable ahead of OPEC’s meeting on Thursday.
On Thursday, Wall Street will be closely watching the government’s October data on the Federal Reserve’s preferred measure of inflation. Economists expect that measure to continue easing, as it has been since the middle of 2022.
Investors have put the latest round of surprisingly good corporate earnings behind them, following several disappointing quarters. The main focus through the end of the year will be on the Fed and what it does next.
The Fed has been holding its benchmark interest rate steady at a range of 5.25% to 5.50% since its last quarter-point hike at its July meeting. Wall Street is betting that the rate will remain stable at the central bank’s December meeting and into early 2024, according to CME’s FedWatch tool.
How the Price of Gold Changed After Each Presidential Election Since 1980
How the Price of Gold Changed After Each Presidential Election Since 1980
Photo Credit: Pixfiction / Shutterstock
Gold has played a pivotal role in human societies for thousands of years. From its uses in jewelry and technology to serving as a monetary standard for major economies, gold has held multifaceted significance in history. Today, the appeal of physical gold endures, driven by its reputation as a hedge against economic volatility and a store of wealth. And while the price of gold is influenced by a wide range of factors that interact in complex ways, the U.S. economy continues to be a major driver of gold prices globally.
Gold Prices Tend To Rise During Periods of Economic Instability, High Inflation, and Low Interest Rates
Gold is commonly used as a safe-haven asset that retains its purchasing power during tumultuous times. As such, the demand for gold and its price tend to rise during U.S. periods of economic instability, high inflation, and low interest rates.
The economic turmoil and inflationary period of the late 1970s saw a corresponding run-up in the spot price of an ounce of gold: from $176 in January 1978 to $653 in January 1980—an astonishing 271% increase in just a two-year period. Similarly, during the subprime mortgage crisis and ensuing Great Recession, gold prices climbed over 119% from October 2008 to August 2011. And most recently, fears of global economic downturn starting in 2018 portended the COVID-19 pandemic and subsequent inflation, all leading to a nearly 66% run-up of the gold spot price from September 2018 to July 2020.
Gold Prices Have Performed Slightly Better Following Democratic Presidential Victories
Similarly, the results of U.S. presidential elections—and their projected impact on the U.S. and global economies—can influence financial markets and gold prices. Looking at data over the past several presidential election cycles, the spot price of gold was more likely to perform worse following Republican victories than Democratic victories. Since 1980, in the two-week periods following a presidential election, Democratic victories saw an average gold price increase of 0.5% while that same period for Republican victories produced an average price drop of 1.1%. When examining the period between election and inauguration days, the effect is amplified. Democratic presidential election wins led to an average gold price increase of 1.5% while Republican wins brought on an average decrease of 5.5%.
This effect may be attributable to gold buyers associating fiscal conservatism of Republican presidents with lower rates of inflation and a stronger dollar. On the other hand, progressive fiscal policies that favor increased government spending may be perceived by gold buyers to produce higher rates of inflation.
To determine how the price of gold changed after each presidential election, researchers at U.S. Money Reserve calculated the two-week change in the spot price of gold following election day. Researchers also calculated the change between Election Day and Inauguration Day, as well as the four-year change. The four-year change compares the spot price of gold between the days before each presidential election.
Here’s how the price of gold has changed after each presidential election since 1980.
11. 1980 Presidential Election
- Gold price change (2-week post-election): -3.4%
- Gold price change (Inauguration Day): -12.3%
- Gold price change (4-year): -46.5%
- Elected President: Ronald Reagan (Republican)
- Runner-up: Jimmy Carter (Democrat)
10. 1984 Presidential Election
- Gold price change (2-week post-election): +0.1%
- Gold price change (Inauguration Day): -10.3%
- Gold price change (4-year): +23.3%
- Elected President: Ronald Reagan (Republican)
- Runner-up: Walter Mondale (Democrat)
9. 1988 Presidential Election
- Gold price change (2-week post-election): -1.1%
- Gold price change (Inauguration Day): -3.4%
- Gold price change (4-year): -19.5%
- Elected President: George H. W. Bush (Republican)
- Runner-up: Michael Dukakis (Democrat)
8. 1992 Presidential Election
- Gold price change (2-week post-election): -1.3%
- Gold price change (Inauguration Day): -3.0%
- Gold price change (4-year): +11.4%
- Elected President: Bill Clinton (Democrat)
- Runner-up: George H. W. Bush (Republican)
7. 1996 Presidential Election
- Gold price change (2-week post-election): -0.1%
- Gold price change (Inauguration Day): -6.6%
- Gold price change (4-year): -30.0%
- Elected President: Bill Clinton (Democrat)
- Runner-up: Bob Dole (Republican)
6. 2000 Presidential Election
- Gold price change (2-week post-election): +0.3%
- Gold price change (Inauguration Day): -0.1%
- Gold price change (4-year): +61.1%
- Elected president: George W. Bush (Republican)
- Runner-up: Al Gore (Democrat)
5. 2004 Presidential Election
- Gold price change (2-week post-election): +3.0%
- Gold price change (Inauguration Day): -1.0%
- Gold price change (4-year): +69.3%
- Elected president: George W. Bush (Republican)
- Runner-up: John Kerry (Democrat)
4. 2008 Presidential Election
- Gold price change (2-week post-election): +2.1%
- Gold price change (Inauguration Day): +18.5%
- Gold price change (4-year): +133.0%
- Elected President: Barack Obama (Democrat)
- Runner-up: John McCain (Republican)
3. 2012 Presidential Election
- Gold price change (2-week post-election): +2.6%
- Gold price change (Inauguration Day): 0%
- Gold price change (4-year): -23.9%
- Elected President: Barack Obama (Democrat)
- Runner-up: Mitt Romney (Republican)
2. 2016 Presidential Election
- Gold price change (2-week post-election): -5.4%
- Gold price change (Inauguration Day): -5.6%
- Gold price change (4-year): +47.9%
- Elected President: Donald Trump (Republican)
- Runner-up: Hillary Clinton (Democrat)
1. 2020 Presidential Election
- Gold price change (2-week post-election): -0.9%
- Gold price change (Inauguration Day): -1.3%
- Gold price change (4-year): +4.4%
- Elected president: Joe Biden (Democrat)
- Runner-up: Donald Trump (Republican)
Methodology
To determine how the price of gold changed after each presidential election, researchers at U.S. Money Reserve calculated the two-week change in the spot price of an ounce of gold following Election Day. Researchers also calculated the change between Election Day and Inauguration Day, as well as the four-year change. The four-year change compares the spot price of gold between the days before each presidential election.
For complete results, see How the Price of Gold Changed After Each Presidential Election Since 1980 on US Money Reserve.
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