Historical data shows divided Congress under Republican president tied to 7.33% average annual S&P 500 return

Historical stock market data shows that the 34 years featuring a Republican president and a divided Congress produced an average annual return of 7.33% for the S&P 500, according to an analysis of nearly a century of market performance. A divided government occurs when one or both houses of Congress are controlled by Democrats while a Republican holds the White House.

While the data indicates more modest returns under this configuration compared to other political arrangements, the average annual return remains decisively positive. The historical record shows no indication that stocks plunge when congressional control is split, and analysts note that the makeup of Congress is rarely responsible for sharp market downturns, which are typically driven by other factors such as margin debt levels and equity valuations.