Presidents get a lot of the blame and take a lot of the credit for stock market performance when in office. While a president's ability to impact the economy and markets is generally indirect and even marginal, the major shifts in world markets following Donald Trump's April 2025 tariff announcement showed it could be far more immediate.

How Presidents Impact the Stock Market

Because presidents are responsible for implementing and enforcing the law, they have some control over business and market regulation. This can be direct or through the president's ability to appoint cabinet secretaries, such as the head of the Department of Commerce, as well as trade representatives. They also negotiate with Congress and sign into law bills th꧅at represent the fiscal policy of the Unite🍨d States.

In addition, the president nominates the chair of the 澳洲幸运5开奖号码历史查询:Federal Reserve, who sets monetary policy, as well as the other Fed governors and members of the 澳洲幸运5开奖号码历史查询:Federal Open Market Committee. The Fed is an independent government bo🌞dy with a mission to set monetary policy that ensures economic growth, low inflation, and low unemployment.

The Fed's monetary policy often affects the stock market—past Fed chair speeches have set off massive buying or sell-offs, although the Fed officials over the years have cautioned the public that they don't consider the performance of the stock market as an isolated factor in their decisions. The extent to which the person picked as Fed Chair is hawkish or dovi🍨sh on monetary policy will determine how they affect the economy.

All presidents would like to be seen as leading the charge during an economic expansion and a rising stock market because those correlate well with better chances of reelection. As President Bill Clinton's campaign manager, James Carville, once famously said, "It's the economy, stupid."

This chart shows the S&P 500's price change over each four-year presidential term going back to 1953, while also including the early performance of the second Trump administration. Two of the terms have two names because President Kennedy was assassinated before the end of his term, and President Nixon resigned before the end of his second term. Their terms were finished by their vice presidents, Lyndon Johnson and Gerald Ford, respectively.

S&P 500 Under Biden

🌳 Under President Biden, the S&P 500 had a choppy ride at first but made record gains in 2024.

Biden took office in January 2021 as markets were stilಞl rebounding from the losses suffered due to the🎃 COVID-19 pandemic. After initially topping out in January 2022, the S&P was buffeted by interest rate hikes as the Fed sought to restrain inflation. Rising interest rates caused the index to fall for most of 2022. Throughout 2023, the market showed increased volatility as market participants speculated on the size and timing of further Fed rate hikes.

After the Fed signaled an end to rate hikes, the S&P began to climb, breaking 5,000 for the first time in February 2024. It continued to rise steadily, peaking in July 2024 and then breaking through 6,000 in Decem♑ber, not long before Biden left office.

Second Trump Administration

President Donald Trump's return to office in January 2025 was initially treated with market optimism, with the S&P 500 gaining 3.6% between the November election and the inauguration. The positive market sentiment on Wall St. was largely in anticipation of tax cuts and business-friendly policies, including deregulation. However, that mood all sharply reversed in April 2025 when Trump announced 澳洲幸运5开奖号码历史查询:sweeping new tariffs that were the highest in more than a century.

The market turmoil was immediate:

• The 澳洲幸运5开奖号码历史查询:S&P 500 Index plummeted 10.5% over two days, wiping out $5.4 trillion in market capitalization. This was its worst decline since the 2020 pandemic, and the following week, it lurched into bear territory.
• Trading volumes reached historic highs, and circuit breakers in markets worldwide were triggered to limit the damage.
• Market volatility, as measured by the VIX, surged to levels last seen during the pandemic.

Companies with significant exposure to global supply chains, such as automakers, semiconductor manufacturers, and companies dependent on imports from China, like Apple Inc. (AAPL), took on heavy stock losses.

The first quarter of Trump's second term thus represented one of the most volatile periods in recent market history, with the unprecedented tariff policy creating what one analyst described as "a defining negative moment in history" for financial markets.

The Bottom Line

While the president can influence the economy through policies and economic agendas that can impact the stock market, in most periods, the president probably gets too much blame and too much credit when it goes down or up. That's because larger macro events, often in motion long before and after specific presidential terms, generally drive 澳洲幸运5开奖号码历史查询:investment sentiment over the longer term.

A strong or bullish stock market, by raising consumer optimism, often rebounds to the president's benefit in approval ratings. The same can be said if the stock market is down and investor sentiment is bearish, auguring poorly for the incumbent at voting time. Perhaps it's often better to look at how the stock market influences the president than the other way around.