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The stock market's best returns have occurred under Democratic presidents with a split Congress

Democratic U.S. presidential nominee and former Vice President Joe Biden speaks about the results of the 2020 U.S. presidential election during an appearance with in Wilmington, Delaware, U.S., November 4, 2020.
Kevin Lemarque | Reuters

Vote counting continued Thursday in the tight presidential race, but odds of a Joe Biden win and a split Congress have increased. If that's the final outcome, history shows that this type of gridlock in Washington has been quite market-friendly for stocks.

The stock market has enjoyed the best returns under a Democratic presidency and a split Congress, according to Sam Stovall, chief investment strategist at CFRA Research, who analyzed data going back to the end of 1944. The S&P 500 has rallied 13.6% on average during a calendar year with such a political makeup, the data showed.

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