THE IMPACT OF U.S. ELECTIONS ON THE TECHNOLOGY SECTOR AND CRYPTOCURRENCY MARKETS

This dissertation investigates the impact of the 2024 U.S. presidential election on financial markets, focusing on two segments particularly sensitive to political transitions: the stocks of the seven largest U.S. technology firms (MAG-7) and the ten leading cryptocurrencies by market capitalization. Motivated by the election of Donald Trump, whose policy record includes unpredictability and a clearly pro-crypto stance, this study applies an event study methodology to assess whether the political shift triggered statistically significant abnormal returns in these markets. The market model was estimated over a 250-day window preceding the election, and abnormal returns (AR), average abnormal returns (AAR), and cumulative abnormal returns (CAR) were computed across multiple short-term event windows. To assess statistical significance, three tests were applied: the classical t-test, the Boehmer–Musumeci–Poulsen (BMP) test, and the non-parametric sign test. Findings reveal that, overall, MAG-7 stocks did not exhibit significant reactions. An exception was Tesla, which showed strong positive returns and volume around the event, likely influenced by Elon Musk’s visible political engagement. In contrast, the cryptocurrency market responded more strongly. Significant CAARs were observed in several windows, suggesting a positive sector-wide reaction to the expectation of deregulation under Trump. These results highlight the different levels of sensitivity between traditional equities and decentralized digital assets, shaped by their exposure to political risk, regulation, and investor sentiment. This research contributes to the literature on political uncertainty and financial markets. It offers insights for investors, policymakers, and regulators regarding how ideological transitions in leadership can influence asset behaviour.