Politics hasn't tended to hold much sway over the stock market – but that could change in 2024, according to Lazard's chief market strategist.

In the $216 billion asset manager's global outlook for 2024, Ronald Temple positioned the upcoming presidential election as a "watershed moment" that could have a major knock-on effect on both the global economy and equity prices.

In a follow-up interview, he told Business Insider why he's expecting the November 2024 contest to be so crucial.

While the past seven years have taken the US on a wild political ride, sometimes it's felt like the stock market has barely paid attention.

Instead, investors have zeroed in on the economy – and since 2016, that's given them plenty of reasons to be cheerful, whatever voters think.

Between his election in 2016 and 2021, Donald Trump – ranked by scholars as one of the worst presidents of all-time – oversaw a 50% surge for the S&P 500, which was powered higher by Republican tax cuts, strong growth, and historically-low interest rates.

Since Joe Biden took office in 2021, the benchmark gauge has climbed another 19%, despite Wall Street's worries about high inflation and a recession that hasn't yet materialized.

Ultimately, the fact many investors pick stocks based on a longer time horizon than four years means that who's in the White House doesn't tend to have much impact on the market, Temple said.

"I typically try to convey to people that a presidential election is not a game-changer for stocks," he told BI. "You're buying all of a company's future cash flows, not just their cash flows for the next four years."

But things could be very different come November, the strategist added.

Temple is highlighting the 2024 election as a potential watershed moment because of how the contest could affect the global geopolitical balance.

Under Biden, Congress has sent around $75 billion to war-torn Ukraine, per data from the Council of Foreign Relations. Last month, the President pledged to carry on providing assistance, despite Republican lawmakers blocking a request for additional funding.

A Republican president could call time on that support. In primary debates, candidates Ron DeSantis and Vivek Ramaswamy have indicated that they don't think giving financial aid to Kyiv should be a priority for the US.

But Washington backing away from the Ukraine conflict could embolden Russia and China and set the stage for a full-blown geopolitical crisis that could hurt the global economy and drag on stock prices, Temple told BI.

"In this election, probably the most important thing from a market and long-term perspective is the geopolitical aspects," he said. "Whether the US continues to finance and support Ukraine is basically on the ballot – and the signals that sends to Vladimir Putin and China will be very important for long-term economic stability and growth."

"That situation will be very important for the long-term cash flows of companies and the economy, so for me it's probably the most important issue of the election," Temple added.

Ukraine and the presidential election aren't the only two issues Temple is keeping an eye on.

The Lazard investing guru believes that monthly inflation prints will continue to be a defining issue for markets 2024, as the Federal Reserve gears up to start slashing interest rates in the second half of the year.

Prices rose at a rate of just 3.2% in October, according to the data from the Bureau of Labor Statistics, in a sign the central bank's aggressive interest-rate hikes are dragging inflation toward its 2% target.

Investors' focus is now likely to shift to how soon rate cuts will come and how steep those cuts will be, according to Temple. Traders currently expect the central bank to start slashing borrowing costs in June, per the CME Group's Fedwatch tool.

Temple told BI that rate cuts will provide a particular boost to small-cap stocks – but added that the Fed is unlikely to be so aggressive that the market echoes its returns two years ago, when 0% interest rates powered growth stocks to massive gains.

"The way I'm thinking about the equity market is I think there will be some relief for the companies that have been hit the hardest by rising rates," he told BI. "One part of the market I'm particularly positive on right now is small caps – 40% of Russell 2000 companies lose money, so these are companies that rely on credit to stay afloat."

"You could get a bit of relief for some of the higher-growth names in the market, but I'd just caution that we're not going to go back to 2021," Temple added.