A stock market signal closely watched by Wall Street professionals indicates that Harris will win the presidential election this week, but some commentators also warn that this historically accurate signal may fail this time.

History shows that when the S&P 500 index (SPX) rises in the three months before the election, the incumbent party candidate has an 80% chance of winning. Conversely, when the S&P 500 index declines in the three months before the election, the probability of the candidate from the other party winning is 89%.

This has been a very accurate signal in every election since 1928. Commentators say that if the S&P 500 index does not erase the 8% gain since August in a single day, Harris is likely to win.

However, market experts interviewed point out that the current market and political landscape are very unique, making this election more likely to be an exception to the historical experience mentioned above.

Sam Stovall, Chief Investment Strategist at CFRA Research, stated that the current election cycle has some striking similarities to 1968, which was a year when the stock market signal failed.

In 1968, President Lyndon Johnson chose not to seek re-election, and Vice President Hubert Humphrey took his place. Similarly, current Biden withdrew from the race and was replaced by his Vice President.

In 1968, the Federal Reserve cut rates between July 31 and October 31, but ultimately it did not help the incumbent party. Similarly, the Fed cut rates by 50 basis points last month, its first rate cut since 2020.

Stover said that the final similarity is that Democrats faced a restless, change-demanding crowd in 1968. The unpopular Vietnam War was the issue at the time. Now, rising prices and immigration issues may suppress the popularity of the Democratic Party.

"Therefore, just like in 1968, the rise in the market may reflect alternative relief rather than expectations of reelection for the current president," Stover said.

Other Wall Street figures have stated that there are significant factors driving the rise of US stocks in 2024 - especially artificial intelligence, which also prevents any political implications.

Jay Hatfield, CEO of Infrastructure Capital Advisors, said: "We believe that US stocks cannot predict election results well because the market has become more concentrated, and the prosperity of artificial intelligence is distorting stock returns."

More importantly, there may be indicators more accurate than the broader S&P 500 index, and these indicators have consistently pointed to Trump's victory.

In recent months, assets related to "Trump trades" have risen, with Bitcoin, Trump media, and technology group stocks, as well as the US dollar, all boosted by expectations of Trump's second term. Billionaire investor Stanley Druckenmiller pointed out last month that the market "strongly believes that Trump will win."

An apparent misjudgment by the stock market on election results in recent history occurred in the 2020 election. That year, the S&P 500 index rose by 2.3% before the November election, indicating a Trump victory, but Biden ultimately won.