More and more Wall Street strategists predict that the outcome of the US presidential election will set the foundation for a rebound in the US stock market until the end of 2024, despite$S&P 500 Index (.SPX.US)$This year's increase has already reached 21%.

Market observers like Mike Wilson from morgan stanley and Dubravko Lakos-Bujasa from jpmorgan said this week that once a candidate declares victory, US stock indices will rise. Meanwhile, strategists at jefferies financial mentioned that market weakness in the week before voting is often a good sign for the market performance in the following month, so last week's plunge might be a call signal.

Of course, after the voting ends on Tuesday, it is uncertain how long it will take for a clear result to emerge from the presidential and congressional composition. The support rates for Harris and Trump have been neck and neck in the polls, helping to suppress risk appetite in recent weeks. With the support of fed rate cuts, economic recovery, and the ai boom, the US stock market hit a historic high last month.

According to deutsche bank, despite the US stock market shaking off its first monthly decline since April, the drop of less than 3% is much milder compared to the average historical decline of 4%-5% before the October presidential election.

Meanwhile, based on the data from the bank, the inflow of funds into US stocks this year has been strong, with approximately $500 billion, a sharp contrast to previous years when funds only flowed in after the general elections.

The year-end rebound calls have historical reasons, as the year-end often marks a period of seasonal strength in the US stock market.

Morgan Stanley's Wilson believes that the election could be a "settling event", triggering a frenzy of stock purchases at the end of the year. He believes that during this period, $S&P 500 Index (.SPX.US)$ it is expected to reach 6100 points, which is about 5.5% higher than the closing price of 5782.76 points on Tuesday.

JPMorgan's Lakhos-Bujas stated that once the results of the presidential election are announced, the stock market will remain stable until December. He expects that with the resilience of the economy and corporate profits, investors' confidence will increase, volatility will decrease, prompting investors to unwind hedges, refocus on the Federal Reserve, and this combination will drive further economic growth.

It is certain that the future of the US stock market also depends on the situation in Congress. For example, Lakhos-Bujas stated that in the case of a political deadlock in Washington, regardless of who wins the presidential election, the stock market will perform well.

According to strategists led by Andrew Greenebaum at Jefferies Financial, in the final weeks of a presidential election year, the performance of the S&P 500 index in the days leading up to the election is more important than which party takes the White House.

Their analysis suggests that if the market rises in the week before election day, the stock market often falls in the month following the election day. However, if the S&P 500 index underperforms before election day, it tends to perform best after election day, with an average increase of about 4% by the end of the year. Last week, the US stock benchmark index fell by 1.4%.

They say that with the establishment of confidence, small cap stocks will bring opportunities, and after the presidential election, the performance of these stocks will outperform the s&p 500 index. According to data since 1980, in non-recession election years, $Russell 2000 Index (.RUT.US)$ the average return rate in the following eight weeks is 7%.

Greenebaum wrote in a note to clients on Tuesday, "especially given the strong fundamental economic backdrop and the Fed's shift towards lowering interest rates, we believe that once events pass, this could be a more compelling opportunity."

Editor/Rocky