Here’s why this presidential election has markets charging higher

London CNN —

Traders could be forgiven for breaking out their champagne glasses, even though 2024 isn’t halfway done yet.

US stocks have leaped from all-time high to all-time high this year: the S&P 500 has surpassed its own record a staggering 31 times since January. That equates to a new all-time high about every four trading days.

Investors have shrugged off elevated interest and inflation rates, a chaotic political and global environment and general economic uncertainty to give markets the best start to an election year on record.

What’s happening: Presidential election years are typically good for stocks.

The S&P 500 alone has generated an average return of 7% during presidential election years since 1952, according to LPL Financial. If you limit that to election years in which the incumbent president is running for reelection, the average jumps to 12.2%.

This year, the index has already far surpassed those average gains. The S&P 500 is 14.6% higher year-to-date — the best start to an election year on record, according to Goldman Sachs — and up nearly 31% from its October 2023 lowat 4,117 points.

So why is this election cycle different from all the others that have gone before?

Gains are typically higher when incumbent presidents run for reelection, most likely because investors crave stability. And this election is the first since 1892 that the nominees of both major parties have occupied the White House, notes Ed Clissold, chief US strategist at Ned Davis Research.

If one incumbent running for office reduces uncertainty, then two incumbents really reduces uncertainty. That could pull the typical year-end election relief rally forward, said Clissold.

A reason to celebrate: Not only are stocks up, they’re