By President Joe Biden recently took a moment to respond to former President Donald Trump’s prediction that the Biden administration would spell disaster for the stock market. With the market reaching record highs, Biden sarcastically commended Trump with a “Good one, Donald” in a social-media post.
While there hasn’t been a collapse as Trump suggested, the question remains: how has the stock market performed under President Biden overall?
Since his inauguration on January 20, 2021, U.S. stocks, as measured by the S&P 500 index (SPX), have gained an impressive 22.5%. This substantial rise occurred over a period of almost three years, overshadowed by a 19.4% drop in 2022 due to the Federal Reserve’s efforts to combat inflation by raising interest rates.
Although a 22.5% gain is significant, it falls short compared to the performance of other recent presidents at a similar point in their terms. The table below, based on Dow Jones Market Data, illustrates this comparison.
According to research conducted by Wilshire Indexes, U.S. stocks have not performed as well under President Biden compared to both President Trump’s single term and President Obama’s two terms. This discrepancy has raised concerns among analysts as the 2024 election approaches.
Philip Lawlor, managing director of market research at Wilshire Indexes, noted that the Biden administration may make efforts to close this gap in cumulative equity return, given the electoral cycle logic. The next year will likely be crucial in determining whether Biden can improve his market track record against Trump’s.
It is worth mentioning that Biden’s stock market performance may improve when compared to Trump’s once the data from 2020, the last full year of Trump’s term, is included in any comparisons. Notably, stocks experienced a sharp decline early in 2020 due to the impact of the COVID-19 pandemic.
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