The stock market in July of a Post-Election Year

Key Points

• This note highlights the performance of the Dow Jones Industrial Average and the S&P 500 during July in Post-Election years
• The key question appears to be "Are you more interested in the return on your money, or the return of your money?"
• The Dow sports a higher win rate (and ten straight wins), but the S&P has outperformed overall

The stock market in July of post-election years

With July inbound, I wanted to highlight the historical performance during July of the Post-Presidential Election years for the Dow Jones Industrial Average (Dow) and the S&P 500 Index (SPX).

The table below displays the % +(-) price change for the Dow and SPX during July of each Post-Presidential Election year starting in 1925. 

NOTE: The "Difference" column is positive if the Dow outperformed and negative if SPX outperformed.

The chart below displays the cumulative growth of $1 invested in the Dow and SPX (price only data) ONLY during July of the Post-Election years since 1925.

The table below presents a summary of the results.

For the record:

• The Dow has shown a gain 80% of the time, versus only 68% for SPX
• The Dow has not shown a loss during a post-election July since 1981 (SPX has had three down post-election Julys since 1981)
• However, SPX has outperformed the Dow during July in 14 of the 25 post-election years
• Also, SPX has shown an overall outperformance (higher cumulative and average/median gains

What the research tells us

It isn't easy to draw conclusions. When it comes to July of post-election years, the Dow has been the more consistent winner (80% versus 68%). Still, the S&P 500 has outperformed the Dow more often than not (14 times versus 11 for the Dow) and showed higher cumulative, average, and median returns. If you are betting on a bullish July 2025, this one comes down to the old Will Rogers line: Are you more interested in the return "on" your money (then favor SPX) or the return "of" your money (then favor Dow).

Lastly, the Dow has gained during July in each of the last ten post-election years. Will that streak continue? Or is the law of averages due to re-emerge?