NEW YORK (AP) — Much like those annoying political TV ads, the warnings come back every four years: All the uncertainty around the U.S. presidential election could have big consequences for your 401(k)!
Such warnings can raise anxiety, but remember: If your 401(k) is like many retirement savers’, with most invested in funds that track the S&P 500 or other broad indexes, all the noise may not make much of a difference.
Stocks do tend to get shakier in the months leading up to Election Day. Even the bond market sees an average 15% rise in volatility from mid-September of an election year through Election Day, according to a review by Monica Guerra, a strategist at Morgan Stanley. That may partly be because financial markets hate uncertainty. In the runup to the election, uncertainty is high about what kinds of policies will win out.
But after the results come in, regardless of which party wins the White House, the uncertainty dissipates, and markets get back to work. The volatility tends to steady itself, Guerra’s review shows.
More than which party controls the White House, what’s mattered for stocks over the long term is where the U.S. economy is in its cycle as it moved from recession to expansion and back again through the decades.
“Over the long term, market performance is more closely correlated with the business cycle than political party control,” Guerra wrote in a recent report.
Where the economy currently is in its cycle is up for debate. It's been growing since the 2020 recession caused by the COVID-19 pandemic. Some pessimistic investors think the expansion is near its end, with all the cumulative slowing effects of the Federal Reserve's hikes to interest rates in prior years still to be felt. Other, more optimistic investors believe the expansion may still have legs now that the Fed is cutting rates to juice the economy.
Politics may have some sway underneath the surface of stock indexes and influence which industries and sectors are doing the best. Tech and financial stocks have historically done better than the rest of the market one year after a Democratic president took office. For a Republican, meanwhile, raw-material producers were among the relative winners, according to Morgan Stanley.
Plus, control of Congress may be just as important as who wins the White House. A gridlocked Washington with split control will likely see less sweeping changes in fiscal or tax policy, no matter who the president is.
Of course, the candidates in this election do differ from history in some major ways. Former President Donald Trump is a strong proponent of tariffs, which raise the cost of imports from other countries, for example.
In a scenario where the United States applied sustained and universal tariffs, economists and strategists at UBS Global Wealth Management say U.S. stocks could fall by around 10% because the tariffs would ultimately act like a sales tax on U.S. households.
But they also see a relatively low chance of such a scenario happening, at roughly 10%.
FILE - An image of President-elect Donald Trump appears on a television screen on the floor of the New York Stock Exchange, Nov. 9, 2016. (AP Photo/Richard Drew, File)
An Israeli airstrike on an apartment in central Beirut has killed seven Hezbollah-affiliated first responders. Israel has been pounding areas of the country where the militant group has a strong presence since late September, but has rarely struck in the heart of the capital.
There was no warning before the strike late Wednesday, which hit an apartment in central Beirut not far from the United Nations headquarters, the prime minister’s office and parliament. Hezbollah’s civil defense unit said seven of its members were killed.
The strike came as Israel was pursuing a ground incursion into Lebanon against Hezbollah, while also conducting strikes in Gaza that killed dozens, including children. The Israeli military said eight soldiers have died in the conflict in southern Lebanon.
Israel and Hezbollah have traded fire across the Lebanon border almost daily since the day after Hamas’ cross-border attack on Oct. 7, 2023, which killed 1,200 Israelis and took 250 others hostage. Israel declared war on the militant group in the Gaza Strip in response. More than 41,000 Palestinians have been killed in the territory, and just over half the dead have been women and children, according to local health officials.
Here is the latest:
JERUSALEM — The Israeli military said Thursday that it killed a senior Hamas leader in an airstrike in the Gaza Strip around three months ago.
It said that a strike on an underground compound in northern Gaza killed Rawhi Mushtaha and two other Hamas commanders, Sameh Siraj and Sameh Oudeh.
There was no immediate comment from Hamas.
The military said the three commanders had taken refuge in a fortified underground compound in northern Gaza that served as a command and control center.
It said Mushtaha was a close associate of Yahya Sinwar, the top leader of Hamas who helped mastermind the Oct. 7 attack into Israel that triggered the war.
Sinwar is believed to be alive and in hiding inside Gaza.
NICOSIA, Cyprus — The British government chartered more flights to help U.K. nationals leave Lebanon, a day after an evacuation flight left Beirut.
The government said in a statement that the flights will continue as “long as the security situation allows” and that it’s working to increase capacity on commercial flights for British nationals.
U.K. Defense Secretary John Healey on Wednesday visited a British military base on Cyprus where around 700 troops, Foreign Office staff and Border Force officers have been deployed to a British military base in Cyprus to help with evacuation plans.
British nationals and their spouses, partners and children under the age of 18 are eligible. Dependents who aren’t British nationals will need a valid visa granting a maximum six-month stay in the U.K.
BEIRUT — An Israeli strike in the Lebanese capital Beirut killed seven health and rescue workers, an Islamic health organization said.
The airstrike in the residential Bashoura district targeted an apartment in a multi-story building that houses an office of the Health Society, a group of civilian first responders affiliated to Hezbollah.
It was the closest strike to the central downtown district of Beirut, where the United Nations and government offices are located.
It was the second airstrike to hit central Beirut this week and the second to directly target the Health Society in 24 hours. No Israeli warning was issued to the area before it was hit. The Israeli military did not immediately respond to a request for comment on the strike in central Beirut or the allegations it used phorphorous bombs.
Israel has mostly concentrated its airstrikes in south and eastern Lebanon, as well as the southern suburbs of Beirut where Hezbollah has a strong presence, but its attacks have spanned the entire country and killed many civilians.
Beirut’s southern suburbs also saw heavy bombardment overnight in areas where the Israeli army had earlier issued a warning online for residents to evacuate.
TOKYO — Japan on Thursday dispatched two Self Defense Force planes to prepare for a possible airlift of Japanese citizens from Lebanon.
Two C-2 transport aircraft are expected to arrive in Jordan and Greece on Friday, Japan NHK national television reported.
Chief Cabinet Secretary Yoshimasa Hayashi told reporters that there has been no report of injury involving the about 50 Japanese nationals in Lebanon.
Japan dispatched SDF aircraft in October and November 2023 to evacuate more than 100 Japanese and South Korean citizens from Israel.
SYDNEY — Australian Foreign Minister Penny Wong said on Thursday her government had booked 500 seats on commercial aircraft for Australian citizens, permanent residents and their families to leave Lebanon on Saturday.
The seats are available to 1,700 Australians and their families known to be in Lebanon on two flights from Beirut to Cyprus, Wong said.
“What I would say to Australians who wish to leave, please take whatever option is available to you,” Wong told reporters in Geelong, Australia.
“Please do not wait for your preferred route,” she added.
A Hezbollah paramedic walks between debris after an airstrike hit an apartment in a multistory building, in central Beirut, Lebanon, Thursday, Oct. 3, 2024. (AP Photo/Hussein Malla)
Lebanese women stand in front an apartment in a multistory building hit by Israeli airstrike, in central Beirut, Lebanon, Thursday, Oct. 3, 2024. (AP Photo/Hussein Malla)
A destroyed apartment in a multistory building hit by Israeli airstrike, in central Beirut, Lebanon, Thursday, Oct. 3, 2024. (AP Photo/Hussein Malla)
Hezbollah paramedics walk between debris after an airstrike hit an apartment in a multistory building, in central Beirut, Lebanon, Thursday, Oct. 3, 2024. (AP Photo/Hussein Malla)
A woman reacts in front an apartment in a multistory building hit by Israeli airstrike, in central Beirut, Lebanon, Thursday, Oct. 3, 2024. (AP Photo/Hussein Malla)
This image from United Nations Television, shows Israel Ambassador Danny Danon during a meeting of the United Nations Security Council, Wednesday, Oct. 2, 2024. (UNTV via AP)
Soldiers carry the coffin of Israeli Army Capt. Eitan Yitzhak Oster, who was killed in action in Lebanon, during his funeral at Mt. Herzl military cemetery in Jerusalem, Wednesday, Oct. 2, 2024. (AP Photo/Maya Alleruzzo)
An Israeli Apache helicopter releases flares near the Israeli-Lebanon border, as seen from northern Israel, Wednesday, Oct. 2, 2024. (AP Photo/Baz Ratner)
Smoke rises from the site of an Israeli airstrike in Dahiyeh, Beirut, Lebanon, Wednesday, Oct. 2, 2024. (AP Photo/Hassan Ammar)
Police stand guard at the site of an apparent Israeli airstrike in Damascus, Syria, Wednesday, Oct. 2, 2024. (AP Photo/Omar Sanadiki)
Workers clean at the site of an apparent Israeli airstrike in Damascus, Syria, Wednesday, Oct. 2, 2024. (AP Photo/Omar Sanadiki)
People collecting remains of victims after an airstrike that hit an apartment in Beirut, Lebanon, Thursday, Oct. 3, 2024. (AP Photo/Hussein Malla)
A firefighter stands in front of an apartment hit by an Israeli airstrike, in Beirut, Lebanon, Thursday, Oct. 3, 2024. (AP Photo/Hussein Malla)
