Posted: 12-12-2024

It’s been one month since Republican Donald Trump won the 2024 presidential election against Democratic nominee Kamala Harris.

Not surprisingly, the election’s outcome has sparked a mix of reactions worldwide: joy, disappointment, and even concern.

While the long-term implications of Trump’s return to office remain uncertain, one thing is clear: the stock market has reacted positively to the results, particularly the S&P 500 — a key index tracking the performance of the 500 largest U.S. publicly traded companies.

The S&P 500 provides a broad measure of the overall market.

Within the S&P 500, many companies donate to both Democratic and Republican causes through Political Action Committees (PACs).

These contributions often go unnoticed by the average investor, despite the millions of dollars flowing into PACs from corporate entities. Donald Trump, for example, received hundreds of millions of dollars in political donations from corporate PACs during the last election cycle.

With Trump’s victory announced on November 6, 2024, we thought it would be interesting to examine how stocks of Democrat- vs.-Republican-supported companies have performed.

So, we split the S&P 500 into two groups: one group of companies that give more to Democrats and the other with companies that give more to Republicans. Then we calculated which group had better overall returns over the thirty days after Trump was re-elected.

In other words, if you had invested $1,000 in each group the day after the election, would you have made more money from one group or the other?

The Results

A quick analysis of the stock market, combined with data from Goods Unite Us’s new tool IndexAlign, reveals some interesting findings.

Of the 500 companies in the S&P 500, 232 donate more heavily to Democrats. Over the first 30 days since Trump’s victory, these Democrat-favoring companies have seen a staggering average return of 1.08%.

On the other hand, there are 267 companies in the S&P 500 that donate more to Republicans, with a significant portion of that going directly to Trump’s campaign.

These Republican-supporting companies have experienced a modest -0.04% return, below the returns of the Democrat-favoring group and below the entire S&P 500’s average.

The Bottom Line: Democrat-Favoring Stocks Have Outperformed Since Trump Was Elected

The results speak for themselves.

Despite Trump’s victory, the companies that support Democrats have outperformed their Republican counterparts in the first 30 days after Trump’s election.

If you had invested $1,000 across the 232 Democrat-supporting companies, your investment would have grown to $1,011.

In contrast, if you had invested the same amount in the 267 Republican-supporting stocks, your investment would have shrunk slightly, totaling $999.59.

While the political landscape may have tilted in favor of the Republicans, it seems that Democrat-backed stocks are currently leading the charge in the market.

A Reflection for All

Given these results, one question remains: Why are politically active investors still putting their money into corporations that donate to causes and candidates that may directly oppose their own political ideologies and interests? As the lines between business and politics continue to blur, it’s worth considering whether aligning your investments with your values could yield better returns — both financially and ethically.