Dec 26, 2019 - Politics & Policy

S&P 500 doubled its average return under past presidents during Trump's first 3 years

Rashaan Ayesh

The S&P 500 has had a return of over 50% during President Trump's first three years in office, more than doubling the average return of 23% at the same point in a presidential term since 1928, CNBC reports.

The big picture: The market, which hit record highs across the three major indices, got a sustained lift in 2019 after Federal Reserve Chair Jerome Powell lowered interest rates three times, the first such moves since the end of the financial crisis.

The big gains under Trump come despite a volatile 2018 that saw the S&P drop 6.2%, thanks to the uncertainty of the U.S.-China trade war.
And by another market's measure, there were worrying signals: the yield curve inverted this year, a phenomenon in the bond market known to precede recessions.

Of note: The S&P's 28.6% growth during Trump's third year lagged behind former President Barack Obama's 32% during his third year, which came as the economy recovered from the financial crisis.

What to watch: The S&P increases two-thirds of the time in a president's fourth year — with an average gain of 5.2%.

For Trump, any success will likely depend on how trade talks with China play out — and whether his "phase one" trade deal can hold.
As part of some of the known terms of that deal, China agreed to buy billions of dollars of U.S. agricultural products and Trump agreed to cancel pending tariff increases.

Go deeper ... Trump: "The reason our stock market is so successful is because of me"

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S&P 500 doubled its average return under past presidents during Trump's first 3 years

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