Jan 20, 2021 - Economy & Business
Trump stock market underperformed Obama's
U.S. stock markets hit record highs during President Trump's time in office, but mostly underperformed his predecessor.
By the numbers: The stock market selloff that followed the outbreak of the coronavirus pandemic wiped out three and a half years' worth of market gains for Trump. As of March 23, 2020, the S&P 500 had lost 1.5% since Trump's first day in office.
- But thanks to the 70% rally that has taken place since then, the country's 45th president was able to finish his term with a more impressive market record than most modern presidents.
Between the lines: Obama inherited a financial crisis and was thus starting from a much lower level than was Trump, who inherited a bull market. During Obama's first term, both the S&P 500 and Dow Jones Industrial Average had higher percentage gains than they did under Trump, although the Nasdaq rose more during Trump's first term.
- Obama's stock returns were aided greatly by the S&P's massive 40% fall in 2008 that pushed the Fed to drop interest rates to near 0% and Congress to pass what was then the largest stimulus package on record, the $831 billion American Recovery and Reinvestment Act.
- Clinton's dramatic stock market gains were powered in part by an easing interest rate cycle from the Fed, which cut rates to the lowest they had been in 20 years — 4.4% — at the start of his term.