Biden vs. Trump: Stock Market Performance Compared

Looking at how stocks performed under Joe Biden and Donald Trump gives insight into what drives price action, how economic policies impact sectors, and what traders should watch for in the next election cycle. The stock market doesn’t care about politics—it cares about money. But traders know that government policies can influence market trends, sometimes in unexpected ways.

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You should read this article because it breaks down how Biden and Trump’s policies shaped the stock market and what that means for your investments.

I’ll answer the following questions:

1. How did the stock market perform under Biden compared to Trump?
2. Which sectors thrived and which struggled during each presidency?
3. How did Biden’s economic policies impact the market?
4. Did Trump’s tax cuts drive stock market gains?
5. What role did inflation and interest rates play under each administration?
6. How did the market react to Biden’s election compared to Trump’s?
7. Did the Federal Reserve have a bigger influence on stocks under Biden?
8. How did COVID-19 affect the stock market under Trump?

Let’s get to the content!

Stock Market Performance Under Biden (2021–2024)

Biden’s presidency has seen market rallies, sharp corrections, and a battle with inflation. Traders had to navigate shifting economic conditions, from post-pandemic recovery to aggressive Federal Reserve rate hikes.

Major Market Trends

During Joe Biden’s presidency, the stock market has seen both record highs and sharp pullbacks. The S&P 500 surged in 2021 as the economy reopened from the COVID-19 lockdowns, but 2022 brought a brutal bear market as inflation and rising interest rates hammered stocks. By 2023 and early 2024, the market rebounded, with tech stocks leading the way.

Companies like Nvidia and Tesla benefited from investor enthusiasm around artificial intelligence and electric vehicles. Meanwhile, banking stocks struggled with concerns over interest rate hikes and economic uncertainty. The market under Biden has been highly volatile, with traders needing to stay adaptable. My experience teaching traders over the years has shown that high volatility creates both risks and opportunities—if you know what to look for.

Impact of Biden’s Economic Policies

Biden’s administration pushed for higher government spending, corporate tax increases, and tighter regulations on certain industries. The Inflation Reduction Act, which focused on clean energy investments, boosted renewable energy stocks but pressured traditional oil and gas companies. The White House also increased scrutiny on big tech mergers and banking regulations, affecting stock prices in those sectors.

Government spending on infrastructure and semiconductor manufacturing helped stocks in those industries. However, the administration’s push for higher capital gains taxes and corporate tax hikes led to concerns about stock market profits. Traders paying attention to these policies saw how different sectors reacted—and used that to their advantage.

Inflation, Interest Rates & Market Volatility

Inflation spiked to 40-year highs under Biden, forcing the Federal Reserve to raise interest rates aggressively. This hit growth stocks hard in 2022, as higher borrowing costs hurt companies that rely on cheap credit. The bond market also reacted, with rising Treasury yields pulling money away from stocks.

By 2023, inflation began to cool, and traders started betting on rate cuts in 2024. The market turned bullish again, but volatility remained high. Interest rate decisions from the Fed played a bigger role in market moves than political headlines. Traders who ignored the noise and focused on price action had the best chance of success.

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Stock Market Performance Under Trump (2017–2021)

Trump’s presidency started with a strong bull market driven by tax cuts and deregulation but ended with one of the fastest crashes in history due to the COVID-19 pandemic. Traders saw both steady gains and extreme volatility.

Major Market Trends

Donald Trump’s presidency saw strong stock market gains, especially in his first three years. The S&P 500 hit record highs multiple times, fueled by corporate tax cuts and deregulation. Large-cap tech stocks, financials, and energy companies performed well as investor confidence soared.

But 2020 brought a massive disruption. The COVID-19 pandemic triggered one of the fastest market crashes in history, with the S&P 500 plunging over 30% in a matter of weeks. However, an equally rapid recovery followed, driven by aggressive Federal Reserve stimulus and government relief programs.

Impact of Trump’s Economic Policies

Trump’s tax cuts, passed in 2017, were a major catalyst for the market rally. Corporate tax rates were slashed from 35% to 21%, boosting company profits and stock prices. Deregulation efforts also helped businesses in the energy, banking, and industrial sectors.

Tariffs and trade tensions with China created volatility, especially for companies dependent on global supply chains. While some industries benefited from protectionist policies, others—like technology and agriculture—faced headwinds. Traders had to adjust their strategies based on how individual stocks reacted to new policies and trade developments.

One major driver of market gains under Trump was corporate tax reform. By cutting the corporate tax rate from 35% to 21%, the Tax Cuts and Jobs Act of 2017 significantly boosted company earnings, fueling stock buybacks and higher dividends. Investors saw this as a long-term win for businesses, helping the S&P 500 surge. However, the deficit grew as tax revenues fell short of spending. Some analysts warned that this could lead to future economic headwinds. Understanding how tax policies impact market trends can help traders anticipate sector shifts. Learn more about Trump’s stock market influence here:

How Does Trump Affect the Stock Market?

COVID-19 Market Crash & Recovery

In early 2020, the stock market collapsed as lockdowns shut down the economy. The Federal Reserve cut interest rates to near zero and launched massive stimulus programs to stabilize markets. Government stimulus checks and business relief programs also played a role in the recovery.

By late 2020, tech stocks, particularly those in e-commerce and cloud computing, led the charge higher. Investors bet on companies that could thrive in a remote-work world, while travel and hospitality stocks struggled. Traders who adapted to these shifts were able to find opportunities even in the chaos.

While the COVID-19 crash was sharp, the market’s rebound was even faster. Government stimulus programs, aggressive Federal Reserve intervention, and the rise of retail trading fueled a historic recovery. Stocks like Tesla and Amazon thrived as consumers shifted to e-commerce and remote work. Speculative trading also surged, with meme stocks like GameStop grabbing headlines. The mix of stimulus-driven optimism and retail trader enthusiasm created massive market swings. Traders who adapted to these shifts found plenty of opportunities, while those who hesitated missed out. For more on Trump’s market impact, check out this article:

Is Trump Bad for the Stock Market?

Biden vs. Trump: Stock Market Performance Comparison

The stock market under both presidents experienced growth and volatility, but different factors drove the market moves. Here’s how the two periods compare:

Presidency	S&P 500 Returns	Key Economic Trends	Major Challenges
Trump (2017–2021)	~70% gain	Tax cuts, deregulation	COVID-19 crash
Biden (2021–2024)	~35% gain (as of early 2024)	High inflation, interest rate hikes	2022 bear market

Stock Market Returns

Trump’s first three years saw a stronger overall stock market return compared to Biden’s. However, Biden’s market faced different conditions—high inflation and rising rates. While both presidents oversaw periods of strong gains, external factors like Fed policy and global events played major roles.

When comparing stock market returns, it’s important to factor in economic conditions. Trump’s presidency started with an expanding economy and low interest rates, making it easier for stocks to climb. Obama, on the other hand, took office during the financial crisis, meaning his market recovery had a lower starting point. While Trump’s tax cuts provided an extra boost to stocks, Obama’s stimulus efforts played a key role in stabilizing markets after 2008. Each president faced unique challenges that shaped market performance in different ways. For a closer look at this comparison, read this article:

Stock Market Under Obama vs. Trump

Sector-Wise Analysis

Stock market performance varied across industries under both administrations. Some sectors thrived, while others struggled due to changing regulations and policies.

Technology: How Big Tech Performed Under Trump vs. Biden

Under Trump, big tech stocks like Apple, Microsoft, and Amazon soared, benefiting from a business-friendly regulatory environment. Biden’s administration took a tougher stance on tech monopolies, but AI-driven growth in 2023 helped tech stocks recover from their 2022 slump.

Energy: Fossil Fuels vs. Renewable Energy Policies

Trump favored fossil fuels, rolling back environmental regulations and boosting oil and gas production. Biden’s policies focused more on renewables, helping solar and wind energy companies while creating uncertainty for traditional oil stocks.

Healthcare: COVID-19, Vaccine Policies, and Pharma Stocks

Healthcare stocks saw volatility under both presidents. Trump’s administration accelerated vaccine development through Operation Warp Speed, benefiting pharma stocks in 2020. Biden’s focus on healthcare expansion and drug price controls created mixed reactions in the sector.

Financials: Banking Regulations and Economic Stimulus Impact

Trump’s deregulatory approach helped banking stocks, while Biden’s tighter regulations and interest rate hikes created a tougher environment. However, higher interest rates also improved bank profit margins on loans, leading to mixed performance.

Job Growth & Market Sentiment

Both Trump and Biden saw periods of strong job growth, but the pandemic created major disruptions. Market sentiment under Trump was more bullish overall, with tax cuts boosting optimism. Under Biden, inflation and rate hikes led to more cautious investor sentiment, though strong job growth in 2023 helped improve market outlooks.

Inflation and Interest Rates

Inflation remained low under Trump, allowing the Fed to keep rates near zero for most of his presidency. Under Biden, inflation surged, forcing aggressive rate hikes that impacted stock valuations. The Fed’s actions had a bigger influence on the market than the White House itself.

Key Takeaways

Market performance under both presidents had strong points and weak spots. Traders who focused on price action rather than politics had the best success.

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Frequently Asked Questions

Did Trump’s Tax Cuts Help the Stock Market?

Yes. Lower corporate taxes boosted company earnings, which helped drive stock prices higher. The market reacted positively to the tax cuts, with strong gains in 2017 and 2018.

Did the Market React Negatively to Biden’s Election?

Initially, there were concerns about higher taxes and regulations, but the market rallied after Biden took office. The post-pandemic economic recovery and strong earnings from tech companies helped drive stock gains in 2021.

Did the Federal Reserve Influence the Stock Market More Under Biden?

Yes. Inflation forced the Fed to raise rates aggressively under Biden, which had a major impact on stock prices. Under Trump, the Fed kept rates low, supporting market growth. Traders who followed Fed policy closely had a better understanding of market trends.

How Did the Stock Market Perform When Barack Obama Left Office Compared to Trump’s Inauguration?

When Barack Obama left the Oval Office in January 2017, the stock market had gained significantly during his presidency, with the S&P 500 rising over 180% from the 2009 recession lows. Donald Trump’s inauguration brought renewed investor optimism, with polls showing strong confidence in his tax cuts and deregulation plans. The market continued its upward trend, with Republican policies favoring corporate growth, but external factors like trade wars and COVID-19 later created volatility.

Did Kamala Harris Have Any Influence on the Stock Market During Biden’s Presidency?

Kamala Harris, as vice president, played a supporting role in the Democratic administration’s economic decisions, particularly in pushing for fiscal policy measures like student loan relief. While her direct impact on the stock market was limited, traders watched policies tied to her agenda, such as banking regulations and income-focused programs, for potential effects on finance and debt markets. The market generally reacts more to monetary policy decisions from the Federal Reserve than to vice-presidential influence.

Did the Risk of Recession Affect Stock Market Performance Under Biden and Trump?

Both Biden and Trump faced recession fears at different points, with Trump dealing with a sharp but brief 2020 downturn and Biden navigating a potential slowdown due to high interest rates. GDP (Gross Domestic Product) growth rebounded quickly after the COVID-19 crash, but Biden’s market saw slower expansion as the Federal Reserve tightened monetary policy to control inflation. Traders watching unemployment data and economic indicators adjusted strategies based on whether the economy showed signs of contraction or resilience.

How Did Monetary Policy and Fiscal Policy Impact Stocks Under Both Presidents?

Trump benefited from loose monetary policy, with the Federal Reserve keeping interest rates low and boosting liquidity in financial markets. Under Biden, fiscal policy focused on higher government spending, while the Fed took a restrictive approach by raising rates to combat inflation, creating pressure on borrowing-dependent stocks. Understanding the balance between government spending and central bank actions helped traders anticipate market movements.

Did Debt and Finance Policies Change Market Behavior Under Biden and Trump?

Trump’s administration prioritized tax cuts and deregulation, increasing corporate profits but also expanding national debt due to reduced tax revenue. Biden’s focus on infrastructure spending and government aid programs added to federal debt, but policies affecting credit cards, banking, and loans created new dynamics for consumer finance stocks. Traders monitoring debt levels and interest rate shifts adjusted portfolios to hedge against potential risks in the finance sector.

How Did ETFs Perform Under Trump and Biden?

ETFs tracking major indices like the S&P 500 saw strong gains under Trump, especially from 2017 to 2019, as corporate profits surged. Under Biden, ETFs with exposure to sectors like technology and clean energy experienced volatility due to interest rate hikes but rebounded as demand for AI and renewables grew. Traders using ETFs to diversify holdings found opportunities in both administrations, depending on economic cycles and sector performance.

How Did Wages, Savings, and Portfolio Growth Compare Under Both Administrations?

Wages rose under both Trump and Biden, but inflation during Biden’s presidency reduced real income growth, impacting consumer purchasing power. Savings rates spiked in 2020 due to stimulus payments but declined as demand for goods and services rebounded, affecting account balances and discretionary spending. Portfolio performance depended on how traders navigated market trends, with indices showing strong gains overall but experiencing sharp losses during high-volatility periods.

How Did GDP Growth Compare Under Biden and Trump?

Gross Domestic Product (GDP) grew steadily under Trump before the sharp 2020 contraction caused by the COVID-19 pandemic, followed by a rapid recovery driven by government stimulus and Federal Reserve policies. Under Biden, GDP growth was initially strong due to post-pandemic demand but slowed as inflation and rising interest rates affected consumer spending and business investment. Traders watching GDP trends adjusted strategies based on economic expansion or contraction, as growth directly influences stock market performance.

Did Student Loan Policies Under Biden and Trump Affect Market Behavior?

Trump paused federal student loan payments during the pandemic, which helped borrowers manage debt but had little direct impact on the stock market. Biden attempted broad student loan forgiveness, which faced legal challenges, but his targeted relief efforts and changes to repayment plans influenced consumer spending and demand for credit. Traders in sectors like retail and finance monitored how student debt policies affected disposable income and overall economic confidence.

How Did Mortgage Rates and Housing Market Value Change Under Both Presidents?

During Trump’s presidency, low interest rates kept mortgage rates low, fueling demand and increasing home values across the country. Under Biden, the Federal Reserve’s aggressive rate hikes caused mortgage rates to spike, slowing housing demand and pressuring real estate stocks while shifting investment focus toward benchmark indices with stronger growth sectors. Traders who tracked interest rate cycles and housing market trends found opportunities in both bullish and bearish conditions.

How Did GDP Growth Influence Voter Sentiment in the Elections of Trump and Biden?

GDP growth often shapes voter sentiment, with strong economic expansion boosting confidence and weak growth creating political uncertainty. Trump saw steady GDP gains before the COVID-19 crash in 2020, which led to economic concerns that likely influenced voters in the election against Biden. Under Biden, GDP rebounded post-pandemic, but inflation and fears of a slowdown affected polls, making economic performance a key issue for voters heading into 2024.

Did Student Loan Policies Under Biden and Trump Affect Voter Support?

Student loan policies became a major issue for voters, with Trump implementing a pandemic-era payment pause and Biden pushing for broader forgiveness. While Biden’s attempts at cancellation faced legal challenges, his administration enacted targeted relief, influencing younger voters who carry large student loan debt. Economic concerns, including student loans and wages, played a role in voter turnout and candidate approval ratings.

How Did Mortgage Rates Impact Voter Concerns About the Economy?

Under Trump, low mortgage rates made homeownership more accessible, contributing to strong housing market growth and economic optimism. Under Biden, rising interest rates made mortgages more expensive, straining affordability and increasing concerns about financial stability among voters. Housing market conditions often shape voter confidence, as home values and loan accessibility influence economic outlook and personal financial security.