Wall Street is collectively bullish! Once the dust settles from the election, U.S. stocks will stage a year-end "grand celebration."

The Zhitong Finance APP has noticed that more and more Wall Street strategists predict that the outcome of the U.S. presidential election will lay the foundation for a rise in the stock market by the end of 2024, while the S&P 500 index has already risen 21% this year.

Market observers such as Mike Wilson from Morgan Stanley and Dubravko Lakos-Bujas from JP Morgan stated this week that once the winner is announced, the stock market benchmark S&P 500 is expected to rise. Meanwhile, strategists at Jefferies noted that a weak stock market in the week before voting is usually a good omen for performance in the following month, suggesting that last week's plunge could be a bullish signal.

Of course, no one can say how long it will take to determine the results of the presidential and congressional elections after voting ends on Tuesday. Vice President Harris and former President Trump are nearly tied in polls, which has helped suppress risk appetite over the past few weeks. The benchmark index of the U.S. stock market has remained below the record high set last month, which was driven by the Federal Reserve's interest rate cuts, economic resilience, and the AI boom.

Deutsche Bank stated that although the U.S. stock market has seen its first monthly decline since April, the drop of less than 3% is milder than the historical pattern of a 4%-5% sell-off on average before the October presidential election. Meanwhile, according to the bank's data, inflows into the U.S. stock market have been strong this year, amounting to about $500 billion, contrasting sharply with the inflows that typically occur only after elections in previous years.

The call for a year-end rise is historically backed, as the end of the year is often a seasonally strong period for the U.S. stock market.

Wilson from Morgan Stanley stated that this election could become a "clearing event," triggering a year-end stock market surge. He believes the S&P 500 index could reach 6,100 during this period, an increase of about 5.5% from Tuesday's closing price of 5,782.76.

Lakos-Bujas from JP Morgan indicated that once the presidential election results are out, the stock market will remain robust throughout December. He expects confidence to increase and volatility to decrease, leading investors to unwind hedges and refocus on the Federal Reserve, while the economy and corporate earnings remain strong, which will drive further stock market gains.

Of course, the stock market outlook also depends on the situation in Congress. For instance, Lakos-Bujas stated that regardless of who wins the presidential election, the stock market will perform well if Washington is mired in political gridlock.

Led by Andrew Greenbaum, Jefferies strategists indicated that in the final weeks of a presidential election year, the performance of the S&P 500 index in the days leading up to the election is more important than which party takes the White House.

The company's analysis shows that if the stock market rises in the trading week before the election, stocks tend to decline in the month following election day. However, if the S&P 500 index performs poorly before the election, it tends to perform best, averaging a rise of about 4% by the end of the year Last week, the benchmark index of the U.S. stock market fell by 1.4%.

They stated that with increasing confidence, small-cap stocks will present opportunities, as these stocks are expected to outperform the S&P 500 index after the presidential election. According to data since 1980, in non-recession election years, the Russell 2000 index has averaged a return of 7% in the subsequent eight weeks.

Greenbaum wrote in a report to clients on Tuesday: "Especially considering the strong fundamental economic backdrop and the Federal Reserve's shift towards lowering interest rates, we believe that once this event passes, it could be one of the more compelling opportunities."