In one week, the name of the next president of the United States will be known, and the race remains extremely close.
The financial community is already analyzing the potential impacts on the S&P 500, whether under a Donald Trump (Republican Party) or Kamala Harris (Democratic Party) presidency.
However, one key element often overlooked is the composition of Congress: will it be controlled by one party, or will it be divided, with each party dominating one of the legislative bodies (the House of Representatives and the Senate)?
Historically, the stock market tends to perform better with a divided Congress. Since 1900, this configuration has occurred 45% of the time, according to Callie Cox, a strategist at Ritholtz Wealth Management. A divided Congress limits major policy changes, creating a stability that appeals to investors.
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