Goodbye Biden! An overview of the performance of the US stock market under his administration.

As the 46th President of the United States, Joe Biden, is about to leave the White House, the U.S. stock market has ended his term with a strong performance. According to Dow Jones market data, since Biden took office on January 20, 2021, the S&P 500 index has risen by about 54%, the Dow Jones Industrial Average has increased by over 38%, and the tech-heavy Nasdaq Composite Index has surged by more than 43%. However, the gains of the S&P 500, Dow, and Nasdaq have not reached their recent highs. The Dow and Nasdaq have recorded their worst performance since George W. Bush's second term (2005-2009), while the S&P 500's increase is the lowest since Barack Obama's second term (2013-2017). Biden's presidency began in 2021 amidst the escalating COVID-19 pandemic and economic recession. However, as the global economy began to recover from the pandemic, the Fed continued its loose monetary policy implemented early in 2020, leading to double-digit gains in major stock indices by the end of 2021. But 2022 was a painful year for Wall Street. The Russia-Ukraine conflict erupted, and the U.S. economy faced the dual challenges of soaring inflation and rising interest rates, resulting in the worst stock market performance since the 2008-2009 financial crisis. It wasn't until 2023 and 2024, driven by the recovery of the tech industry and the AI boom, that the U.S. stock market returned to growth. The S&P 500 index achieved double-digit gains for two consecutive years and entered its third year of a bull market. David Russell, Head of Global Market Strategy at TradeStation, stated, "The economic restart after the COVID-19 pandemic, along with the 'Inflation Reduction Act' introduced by the Biden administration in 2022, provided strong support for industrial activities, indirectly leading to the high interest rates and bear market of 2022. However, the rise of AI is a completely different driving factor, a trend that had been brewing for years before early 2023." From the post-election period to Biden's departure, the performance of the stock market was affected by various factors. As Biden prepares to leave office, investors are hopeful that the Trump administration may further strengthen the economy and corporate development through tax cuts, relaxed financial regulations, and increased tariffs. However, these plans may lead to an expansion of the fiscal deficit and a rise in inflation, which could impact the government bond market and push up interest rates. After the election day, the stock market initially rallied significantly but later gave back some of those gains. As of January 16, the S&P 500 had only risen by 2.7% since election day, marking its worst performance during the same period since Obama's victory in 2008; the Dow rose by 2.2%, and the Nasdaq saw an increase of nearly 5%. In the future, the direction of the Federal Reserve's monetary policy remains a focus for investors. Despite recent modest performance of the Consumer Price Index (CPI), boosting both the stock and bond markets, the market still faces uncertainty as U.S. bond yields fluctuate. Experts generally believe that Trump's policies may push the market past its current consolidation phase, but also caution investors to be aware of potential risks. On the last trading day of Biden's term, the three major indices closed up, and U.S. bond yields fell, providing support to the stock market. Next week, Trump will be inaugurated again, and the market may see a new round of volatility.