U.S. presidential elections and stock markets: Evidence from the 2024 elections

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bachelor_Winterhalter_Sami_2025.pdf (477.84 KB)

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School of Business | Bachelor's thesis
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Date

2025

Department

Rahoituksen laitos

Major/Subject

Mcode

Degree programme

Rahoitus

Language

en

Pages

24 + 6

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Abstract

In this thesis I analyse the correlation prediction market odds and industry level stock market returns. My findings ultimately support the existing literature around the meaningful impact that election races and campaigns have on the stock market through economic policy platforms. My study provides some statistically significant evidence of partisan bias inherent to select industries. My statistically significant findings around election uncertainty effect also support the theory of industries being sensitive to election uncertainty in addition to the overall political uncertainty. I ultimately present that the lead up to the 2024 U.S. presidential election was an exceptionally unique and unprecedented event. The patterns described in my hypotheses, while present, were far less pronounced compared to the historical observations. I argue that this results more from the nature of this particular election than from the limitations stemming from the choice to study only a single election.

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Thesis advisor

Keloharju, Matti

Keywords

presidential elections, stock markets, economic policy ucertainty, prediction markets, partisanship theory

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https://urn.fi/URN:NBN:fi:aalto-202505183737

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[kand] Kauppakorkeakoulu / BIZ (Open Access)