A final look at how the U.S. stock market performed under Joe Biden

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U.S. stocks finished on an upward note as President Joe Biden said goodbye to the White House.

The 46th president of the United States is finishing out his time at the White House having seen the S&P 500 rise by over 55% since he took office on January 20, 2021. The Dow Jones Industrial Average advanced more than 39% over the same time period, while the tech-heavy Nasdaq Composite jumped nearly 46%, according to Dow Jones Market Data.

Meanwhile, the Dow and Nasdaq experienced their worst performances since George W. Bush was in office for the second time between 2005 and 2009, while the S&P 500 saw its smallest increase since Barack Obama's second term between 2013 and 2017, according to Dow Jones Market Data (see table below).

Biden's presidency started in 2021, amidst a surge in the COVID-19 pandemic and economic decline. Major stock indexes still showed double-digit gains at the end of that year, as the global economy started to recover from the pandemic, with the Federal Reserve continuing to implement the monetary policy measures it had introduced in early 2020.

In 2022, Wall Street had its worst year since the 2008-09 financial crisis, due to Russia's invasion of Ukraine, while the US economy struggled with high inflation and rising interest rates.

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David Russell, global head of market strategy at TradeStation, said there's been "an explosive surge" in cyclical sectors of the economy that benefited from the reopening after the pandemic and the Biden administration's landmark Inflation Reduction Act in 2022, which really spurred industrial activities, triggering higher interest rates and the bear market of 2022, he told on Friday.

"But then the AI technology became a completely different catalyst for the market because it had nothing to do with Biden's presidency. It had been gathering momentum for years before hitting its stride in the early part of 2023," Russell said.

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Hopes on Wall Street have been running high since Donald Trump was elected president in early November. Investors have been betting that his return to the White House could further boost the economy and corporate America by offering tax breaks, reducing financial regulations, and raising tariffs.

Some of his economic plans could lead to a rising fiscal deficit and a comeback of inflation, which may harm the government debt market and drive interest rates even higher.

During the next two months. The S&P 500 went up 3.7% from Election Day through January 17, which was its worst performance over that period since Barack Obama was elected in 2008. The Dow Jones Industrial Average jumped 3% and the Nasdaq was up 6.5% in the same period, according to Dow Jones Market Data (see chart below).

'Said George Cipolloni, portfolio manager at Penn Mutual Asset Management.'

causing a decline in the 10- and 30-year interest rates.

"We've essentially stabilized on the higher end, but any change in Treasury yields will significantly impact the stock market," Cipolloni explained to a phone call on Friday.

Trump's First Day: Incoming president all set to act on tariffs, cryptocurrencies, energy, and immigration.

But in Russell's view, "there's no reason for investors to just assume Trump will do everything in a way that will cause problems" for the financial markets and the economy, since all these fears about tariffs resulting in higher inflation may just become 'a wall of worry' that dissolves.

The stock market has been fluctuating “sideways” over the past three months and remains around the same level as when it settled on Election Day, which leads Russell and his team to believe that the market may break out of its recent consolidation period very soon.

What has emerged in the last few weeks, and we see the new president coming in with executive orders [on deregulations]," he said. "People who have been sitting on the sidelines might feel that there's a reason to get more involved again.

the final trading day of Biden's term in office. All three major benchmarks experienced weekly gains amidst a decline in Treasury yields. Investors also looked ahead to next week, when Trump is to be inaugurated as President of the United States for the second time.

Oil traders are making significant bets on President Trump's policies, but the path ahead for oil prices is not straightforward.