10 Presidents With the Best Stock Market Record

The Trump administration is finally in the books, and investors have been busy preparing for President Joe Biden, who was just sworn into office.

Investors are hopeful that the Biden administration will deliver a large stimulus package that will speed up the economic recovery from the coronavirus pandemic and juice consumer spending. Additionally, renewable energy stocks, among other sectors, have gotten a boost since Biden’s victory, as the new president is expected to prioritize action on climate change and has already signed an executive order to rejoin the Paris climate agreement.

Stock market performance is a favorite metric among investors for measuring presidents, and though the commander in chief has little direct influence over the stock market, the performance of the Dow Jones Industrial Average is an easy window into the economy during each president’s tenure.

Trump will finish his term with a solid 56% gain in the Dow. How does that compare with past presidents?

Keep reading to see the 10 presidents with the best stock market record, going back to the Great Depression.

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President Ford had a short tenure, filling out the remainder of Richard Nixon’s term after Nixon resigned. After a dip during the concluding months of 1974 following the August resignation, the market surged in 1975 as it emerged from the 1973-1974 recession. That downturn came after the end of the Bretton Woods Agreement tying the U.S. to the gold standard and as major economies battled inflation.

In fact, the Dow surged more than 40% in the first half of 1975 with investors piling into stocks as the economy bounced back, a pattern that’s happened repeatedly in early bull markets.

Among the big winners during that period were Walt Disney and Walmart, both of which more than doubled in the first half of 1975. Disney had opened Walt Disney World only a few years earlier and was in the process of adding other parks, while Walmart was just beginning its evolution as a dominant retailer

Ford’s performance shows that where a president’s term falls in a market cycle often has more bearing on stocks’ performance during their tenure than anything else.

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The Johnson administration, which lasted a little more than five years, began with tragedy following the assassination of John F. Kennedy. Unsurprisingly, stocks plunged following Kennedy’s death as the Dow fell 2.9% on Nov. 22, 1963, but then quickly rallied, climbing steadily through 1964 and the first months of 1965.

Notably, the Johnson/Kennedy years were characterized by an economic expansion, and included no recessions for the entire eight years.

Though stocks gained in 1964-1965 as Johnson pushed his Great Society program forward, they entered a brief bear market in 1966 as the Federal Reserve tightened rates in response to the economic expansion. Stocks recovered in 1967 and 1968, a reminder that social and political unrest, which included the assassinations of Martin Luther King Jr. and Robert F. Kennedy and the worsening of the Vietnam War, aren’t enough alone to deter a bull market.

Ironically, a president who lost re-election primarily because of a recession and who hurt his own case with his broken promise, "Read my lips. No new taxes,” presided over solid gains in the stock market.

The market trended upward for nearly the entirety of Bush’s term, with the exception of the second half of 1990 as the economy sank into a modest recession at the end of that year.

Tightening monetary policy from the Federal Reserve to control inflation helped lead to the recession, as did the oil price shock that resulted from Iraq’s invasion of Kuwait in August 1990.

Notably, stocks plunged in August of that year, but then rebounded the following January when the U.S. began Operation Desert Storm, successfully driving Iraq from Kuwait.

Though unemployment rose during 1991 and into 1992 due to a weak recovery from the recession, stocks continued to rise, jumping at the end of 1991 as the Soviet Union dissolved, signaling the end of the Cold War.

More than most presidents, Trump used the stock market as a gauge for his own performance and repeatedly touted record all-time highs on the Dow on Twitter.

Trump generally received his highest marks on the economy as the unemployment rate was near historic lows before the pandemic, and his pressure on the Federal Reserve to lower interest rates did not lead to inflation as some feared, and likely boosted stocks. Additionally, investors cheered the Tax Cuts and Jobs Act, which lowered the corporate tax rate from 35% to 21%, among some other pro-business changes.

The market crashed when the pandemic hit last March, and the Dow’s plunge was the fastest entry into a bear market in history. However, stocks made a surprising rebound thanks to a huge stimulus package from Congress and aggressive bond buying from the Federal Reserve to restore confidence in liquidity.

That rebound helped save the stock market performance under Trump, though stocks have continued to rise since Biden was elected.

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President Truman presided over the beginning of the postwar economy, often remembered as halcyon days for the U.S. economy as the country enjoyed its newfound status as leader of the free world.

However, the stock market mostly traded sideways for the first few years of Truman’s presidency. The end of World War II and the return to a peacetime economy led to a spike in inflation, which jumped 8% in 1946 and 12% in 1947.

That precipitated a recession that included a rise in the unemployment rate and a railroad strike. Truman nearly lost re-election, but enjoyed a strong expansion in his second term as the baby boom took hold and energy prices fell. Meanwhile, the unemployment rate fell from 7.9% to just 3%.

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Truman’s successor, Eisenhower, enjoyed a boom through much of his two-term presidency as many of the factors that contributed to strong growth in Truman’s second term remained. Stocks surged through 1954 and much of 1955, but plunged by 6.5% on Sept. 26, 1955.

Stocks traded sideways through 1956 and 1957, but took off again over 1958-1959 in the aftermath of a recession in 1958.

Eisenhower is credited with strengthening Social Security and building the interstate highway system, the biggest infrastructure project in U.S. history and one that has doubtless contributed to economic growth since then.

The 35th president actually endured three separate recessions, but the market’s performance shows that mild recessions have little long-term impact on stocks.

Known for union-busting and tax cutting, Reagan was considered a friend of big business and presided over above-average stock market returns as president. However, the Reagan years weren’t without their challenges for investors.

Early in his presidency, the economy experienced one of its deepest recessions in the postwar years in 1982, sometimes called the Volcker Recession.

With inflation around 15% at the start of Reagan’s presidency, Fed Chair Paul Volcker hiked interest rates as high as 19% in order to bring consumer prices under control. The strategy worked to control inflation but sent unemployment up to nearly 11% and soaked investors as well, as stocks slipped through the first two years of Reagan’s presidency.

Still, the economy recovered quickly as interest rates came back down, and stocks gained over the next four years before plunging 22% on Black Monday in 1987. The cause of that crash is unclear and has been blamed on computer algorithms automating selling along with fears of a bear market. Stocks rose over the duration of Reagan’s last term but never returned to their precrash heights.

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President Obama took over during the worst market crash since the Great Depression, but stocks bottomed out just seven weeks after his first term started. The market benefited from the Recovery Act, which helped speed up the recovery, reduced unemployment, and buoyed consumer spending through a series of tax cuts and credits. Additionally, the auto bailout helped save an iconic U.S. industry and hundreds of thousands of jobs.

Emerging from the depths of the crisis, the economy steadily improved over the course of Obama’s presidency with unemployment gradually falling.

The stock market performed similarly, steadily rising following the surge in 2009. There were some brief sell-offs, including the S&P’s downgrade of the U.S. credit rating in 2011 over the debt ceiling standoff, but investors generally enjoyed a near-unprecedented period of prosperity and reliable growth.

Like Obama's, FDR’s stock market performance benefited from beginning at a nadir in the depths of the Great Depression. FDR also had the longest tenure of any president, serving for a little more than 12 years.

Stocks surged in 1933, Roosevelt’s first year, as investors were encouraged by a change in president and the New Deal, which helped reestablish faith in the banking system by creating regulatory agencies like the FDIC and the SEC, as well as passing the Social Security Act and implementing a number of work relief programs that helped lower the unemployment rate.

The recovery would take several years, but the collapse in stocks earlier created an opportunity for investors.

Stocks plunged in late 1937 as the recovery stalled, industrial production fell, and unemployment rose, and they tumbled again in 1940 when World War II spread west from Germany. However, the U.S. involvement in the war starting in December 1941 largely coincided with a bull market as stocks rose when the war turned decisively in the Allies’ favor in 1942.

Clinton’s presidency was bookended by two recessions, one at the end of George H.W. Bush’s first term and another that came at the end of his presidency. That favorable timing and an unprecedented tech boom helped fuel the market to record returns during the Clinton administration.

Though the market was relatively sleepy through the first two years of Clinton’s presidency, stocks began to take off in 1995 as the spread of the World Wide Web sparked a wave of demand for internet stocks that ultimately culminated in the bubble bursting in 2000.

Notably, while the Nasdaq was the focus of tech investors and saw the biggest gains during the boom years, even stodgy Dow stocks like Coca-Cola and Walmart benefited from the fervor among investors, which drove the blue chip index to more than triple under Clinton.

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While investors will search for clues in stock performance under past presidents, much of the results are coincidental. For instance, it’s likely that any president would have seen the same boom in tech stocks that took place under Bill Clinton. Had George H.W. Bush won in 1992, he would have benefited from the dawn of the internet.

Similarly, the No. 2 and No. 3 presidents on the list, FDR and Obama, both had the advantage of taking over after stocks had plunged sharply.

It’s important for investors to remember that while there can be some correlations between presidential performance and the stock market, such as Herbert Hoover’s ineffective response to the Great Depression, generally there are more important factors at play such as the broader economic cycle, interest rates and the Federal Reserve’s monetary policy, and other disruptions or innovations outside of the president’s control.

Keep that in mind as we see how the stock market performs under Joe Biden, the 46th president.

Jeremy Bowman owns shares of Walt Disney. The Motley Fool owns shares of and recommends Twitter and Walt Disney. The Motley Fool has a disclosure policy.