How Did the Stock Market Perform Under Biden vs Trump’s First Term?

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Although there is certainly volatility and speculation regarding who will win the presidential election every four years, history shows that it’s nearly a non-event in terms of long-term stock market returns. According to Bloomberg, in the post-World-War-II era, the market has posted solid gains under both Democratic and Republican administrations, although CFRA Research noted that it has fared better in terms of absolute returns under Democrats. 

But it’s hard to link absolute market returns to specific presidents, as most inherit both the good and the bad from the prior administration. This isn’t to say that markets aren’t influenced by who is in the Oval Office. Certainly, some industries tend to benefit more than others based on the policies coming out of the executive branch. But as a whole, the market still tends to trade upwards, regardless of who the president is.

While personal bias tends to color the reasons why the stock market did better or worse under a specific president, it’s still interesting to look at how it has performed under different chief executives. With that in mind, here’s a look at how S&P 500 returns differed under Presidents Joe Biden and Donald Trump.

Biden’s Presidency

The stock market under Biden had its share of ups and downs, but the S&P 500 ultimately ended up with a gain of just over 55%, according to Morningstar.

As is often the case over a four-year presidency, the stock market under Biden moved in fits and starts. The 46th president inherited the troubles from the COVID-19 pandemic and ensuing economic turndown, but the market managed to turn around strongly and finish with a gain of over 26% in 2021.

However, this was followed by a plunge of nearly 20% in 2022, marking the worst year for the S&P 500 since 2008, according to S&P Global. 

The Biden administration then benefited from strong back-to-back gains of over 20% in 2023 and 2024, fueled by a huge rally in tech and AI-related companies. 

But presiding over a return of essentially zero for the first two years of his presidency held back Biden’s overall returns. According to Investor’s Business Daily, Biden ranks No. 6 in terms of stock-market performance during presidential terms since Reagan was elected in 1981.

Trump’s First Term

During Trump’s first term in office, from 2017 to 2021, the S&P 500 index posted a solid gain of 67.3%, according to Investor’s Business Daily. This edges the performance during Biden’s presidential term of just under 56% and is good enough to rank Trump No. 5 in terms of presidential performance since 1981.

Like Biden, Trump endured both highs and lows during his first term. The most notable drag on the economy and the market’s performance under his term was the pandemic, which struck in Q1 2020. However, a flood of stimulus and massive interest rate cuts by the Federal Reserve Board helped propel the market to new highs during Trump’s first term. 

Nasdaq Returns

Worth noting is that, while the S&P 500 returned just a touch more under Trump than Biden, the Nasdaq absolutely exploded by comparison. Even factoring in the big tech-market boom of 2023 and 2024, the Nasdaq returned just 45.9% under Biden’s presidency.

During Trump’s first term, on the other hand, the tech-heavy index posted a stellar triple-digit gain of 137.6%. Since 1981, this marked the top Nasdaq return under any president, according to Investor’s Business Daily.

The Bottom Line

As you might expect from any politician, presidents tend to boast about good stock market returns and disclaim any responsibility for poor performance. But while presidents can enact policies that lead to real market change, there are many other factors affecting the U.S. stock market, from inflation and interest rates to geopolitical events and many others.

The bottom line is that over time, the market tends to do well no matter who is in office. While Trump’s term topped Biden’s in terms of absolute market performance, long-term investors are generally best suited riding out the ups and downs of the day-to-day market, regardless of who’s in charge.

Editor’s note on political coverage: GOBankingRates is nonpartisan and strives to cover all aspects of the economy objectively and present balanced reports on politically focused finance stories. You can find more coverage of this topic on GOBankingRates.com.

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