Since 1945, the S&P 500 has generally performed better during Democratic presidencies compared to Republican ones. On average, the S&P 500 saw an annual gain of 11.2% under Democratic presidents, compared to 6.9% under Republican presidents. This trend highlights a clear outperformance during Democratic administrations. The stock market also tended to perform particularly well when a Democratic president was paired with a split or Republican-controlled Congress, with annual returns exceeding 13% in such cases.
This outperformance is consistent across various studies, showing a long-term advantage under Democratic leadership.
In this article we are going to investigate in detail the performance of the S&P500 (SPX) during the latest 30 years during the administrations which have seen five different U.S. presidents.
The best S&P 500 performance under a U.S. president since 1945 occurred during Bill Clinton’s presidency (1993–2001), where the market surged by over 200%, driven by the dot-com boom and strong economic growth. On an annualized basis, the S&P 500 delivered a return of approximately 15% during Clinton’s term.
Conversely, the worst performance occurred during the presidency of George W. Bush (2001–2009), when the S&P 500 fell by around 40%. His term was marred by the dot-com bubble’s burst, the 9/11 attacks, and the 2008 financial crisis, which severely impacted stock market returns
he overall S&P 500 performance during the terms of Bill Clinton and George W. Bush reflect two vastly different economic periods:
Bill Clinton (1993–2001):
Under Clinton, the S&P 500 experienced stellar growth, rising by more than 200% over his two terms. On an annualized basis, the market delivered returns of approximately 15%. This period was marked by strong economic growth, declining interest rates, and the tech boom, which drove stock prices significantly higher. It was one of the best stock market performances of any president in U.S. history.
George W. Bush (2001–2009):
In contrast, the S&P 500 declined by around 40% during Bush’s presidency, leading to an annualized loss. His time in office was marred by significant economic challenges, including the aftermath of the dot-com crash, the 9/11 terrorist attacks, and the 2008 global financial crisis, which led to severe stock market losses.
The performance of the S&P 500 during President Barack Obama’s two terms reflected a robust recovery from the 2008 financial crisis and subsequent economic growth:
First Term (2009–2013):
When Obama took office in January 2009, the U.S. was still deep in the 2008 financial crisis. The S&P 500 bottomed in March 2009, and from that low point, it staged a strong recovery. By the end of his first term, the S&P 500 had risen by about 85%, driven by monetary stimulus and recovery efforts.
Second Term (2013–2017):
In Obama’s second term, the S&P 500 continued its upward trajectory, increasing by approximately 53%. The economy was solidifying its recovery, with low interest rates and improving corporate profits contributing to the continued rise of the stock market.
Overall, during Obama’s eight years in office, the S&P 500 gained around 166%, marking one of the best periods for stock market performance under any president.
Comparing the S&P 500 performance during Donald Trump’s and Joe Biden’s presidencies reveals significant differences, influenced by global events and economic policies:
Donald Trump (2017–2021):
Overall Performance: The S&P 500 rose by 67.8% during Trump’s four years in office. His first three years saw steady growth, before the COVID-19 pandemic caused a sharp market decline in 2020.
Annualized Returns: Trump’s presidency averaged 14.5% annual gains in the S&P 500.
Impact: Trump’s tenure saw a business-friendly environment with tax cuts and deregulation, contributing to strong market performance, although the pandemic significantly impacted his final year in office.
Joe Biden (2021–present):
Overall Performance: Since Biden took office in January 2021, the S&P 500 has increased by about 34% as of early 2024. His first year alone saw a remarkable 37.4% gain, marking one of the strongest starts for a presidency in stock market history.
2022 Decline: Biden’s second year was marked by a 19% drop in the S&P 500, largely due to rising inflation and aggressive Federal Reserve rate hikes.
Annualized Returns: So far, the average yearly gain under Biden has been around 11.9%, slightly lower than Trump’s annualized performance.
Both presidencies had moments of strong market growth, but they also faced significant challenges—Trump with the COVID-19 pandemic and Biden with high inflation and monetary tightening.
Photo by pelican
