US stocks (^DJI,^GSPC, ^IXIC) are trading near record highs following former President Trump winning the presidential election. Bloomberg Intelligence's chief equity strategist and global director of equity strategy, Gina Martin Adams, explains while Trump's victory has supported the rally, there are other factors driving the post-election surge that investors should keep in mind.

"First and foremost," the strategist explains, "It's first pretty important to recognize seasonality, particularly seasonality following an election cycle. We did very typically have a weak October. We very typically have a weak October in advance of [the] US elections, followed by a significant bounce in November and December. So we should anticipate that seasonality will favor stocks. It's not atypical for stocks to experience a bounce with a post-election kind of relief rally."

"Secondly, I think you need to consider where we are in the economic cycle, where we are in the yield curve cycle, and where we are as well, with respect to the earnings cycle. Very importantly, these are strong long-term drivers of stocks. The yield curve is becoming much more upward-sloping. That's certainly driving some preference for financials. Financials also had a fantastic third quarter earnings season. To follow up on what was a very solid second quarter earnings season as well. That's creating some optimism on financials irrespective of the election that the election results and the potential for regulatory easing to benefit that sector as well."

She adds, "It's also important to consider what's going on broadly in the macro and we're coming off of a point of very weak macroeconomic conditions. It's been a choppy recovery from the earnings recession that the S&P 500 experienced in 2022 and 2023, but we're starting to see that earnings sort of broadening occur. We started to see this up to six months ago. It's continuing in the near term. And that's allowing for better performance, a better distribution of performance across the market."

The strategist says, "As much as the election is certainly playing into market conditions in the short term, there are a lot of other underlying factors that I think are really important to consider. One of the big things, though, that we did see yesterday that was very different than the 2016 election response and markets was healthcare. In the 2016 post-election rally, the two sectors that performed best were financials and healthcare. That was not the case yesterday. What we saw was financials and industrials instead as strong performers. Healthcare was a very big laggard. This, I think, is the sector to watch going forward."