With election results finalized, investors take a breath.
The election is over—and financial markets are breathing a huge sigh of relief.
Case in point: Investors are much less nervous than before election night. Expected market volatility—as measured by the CBOE S&P 500 9-day Volatility Index—has plummeted 50%, from 26.1 in late October to just 13.1 on November 8 (see the chart).
Stock Market Volatility is Way Down, Post-Election
Source: Bloomberg, calculations by Horizon Investments, data as of 11/08/2024.
We believe the significant drop has less to do with which candidate won than with a quick outcome to the race. Wall Street hates uncertainty, so having a clear result that didn’t take days to determine helped ease investors’ jittery nerves.
The decrease in expected market volatility could set the stage for positive stock performance for the rest of the year. Many questions remain about the potential impact of President-elect Trump’s proposed policies, but for now, with the election outcome resolved, we expect to see a relatively calm market environment that could help push stock prices higher.