As president, Donald Trump regularly took credit for a rising stock market, citing it as evidence that his economic policies were enriching Americans.

Now, Trump is again using the stock market as a barometer — attributing its rise earlier this year to excitement about his candidacy and blaming his rival, Vice President Kamala Harris, when stocks recently wobbled.

As the S&P 500 nears another record high, the stock market could be featured further as a talking point on the campaign trail. Although President Joe Biden has been less emphatic in his stock market proclamations, he, too, has cited it as a sign of a healthy economy under his watch.

The reality of what drives Wall Street is much more complicated. Stocks, like the economy, ebb and flow for many reasons. While the outlook for White House policy can be one of them, big and sustained moves in the overall market have historically had more to do with other things, from Federal Reserve decisions to the potential for new corporate innovation like artificial intelligence.

“I think markets are politically agnostic,” said Kristina Hooper, chief global market strategist at Invesco. “With good reason, because it doesn’t really matter.”

Doing the numbers

Both Biden and Trump have enjoyed healthy stock rallies under their watches. The S&P 500 has risen roughly 67% since Biden won the last election, compared with just under 60% for the same period under Trump. The index rose 65% from when Trump was elected in 2016 through to the 2020 election.

The S&P 500’s 15% rise over the first half of this year has been widely attributed to the rally in a handful of stocks deemed to be beneficiaries of the boom in artificial intelligence, not to Trump’s chances of regaining the White House. The index’s brief sell-off from mid-July through early August arose in part from divergent monetary policy between Japan and the United States and the rapid unwinding of trades that were no longer as profitable, not from Harris’ entry into the presidential race.

A sharp stock market recovery this month is seen as predominantly a reaction to the increasing likelihood, in light of economic data, that the Fed will cut interest rates in September.

While the attempted assassination of Trump and Biden’s decision last month to leave the presidential race did register with investors, “I don’t think it’s what’s driving the market right now,” said George Goncalves, head of U.S. macro strategy at MUFG Securities.

This is not to say politics has no bearing on the stock market at all. White House policy has the potential to influence the economy. The economy helps to drive corporate profits. The stock market is, in theory, a reflection of how profitable investors think public companies will be.

Focused on outcomes

“It’s not that elections don’t matter, but for investors the focus on growth and inflation does a better job at explaining what the potential outcome may be,” said Thomas Hainlin, global investment strategist at U.S. Bank, who has studied the statistical relationship between presidents and the stock market.

“Is there any definitive correlation between presidents and the stock market? We found it has been fairly weak,” he said.

Typically, the S&P 500 falls before an election and rises afterward. Biden’s win in 2020 was preceded by two months of losses for the index, before a bumper 10% rally in November that coincided with advancements in COVID vaccine developments. In 2016, the S&P 500 nudged lower for three months before rallying a little over 3% after Trump won the election.

Analysts attribute this dynamic to the frequent refrain that investors dislike uncertainty, with a rally kicking in once the election outcome is known, rather than its being specific to any one candidate or party. Over the longer term, who is in the White House has mattered less.

Going back to Dwight Eisenhower’s first term, which began in 1953, only three presidential terms have resulted in negative returns for the S&P 500 — Richard Nixon’s second term, which Gerald Ford finished, and both of George W. Bush’s terms.