How do elections affect the stock market?

Uncertainty around elections – and the potential policy decisions of new governments – can lead to fluctuations in the stock market. Over the longer term, the party in power seems to make limited difference to the performance of shares in publicly listed companies. General elections affect stock markets. The uncertainty around their outcome typically increases market volatility before votes are cast. Markets also continue to adjust after an election takes place as the policy priorities of the newly installed government …