When people ask “which president was best for the stock market?”, they’re usually looking for a simple answer.

But markets aren’t simple.

You’ll often see headlines comparing:

• US presidents and their impact on the stock market
• Stock market returns by president
• Democrats vs Republicans stock market performance
• Whether election years affect stocks

And while the data is real… the conclusions are often misleading.

While cycles cause the stock market to go up and down, the long-term direction is almost always upward.

Below is a chart of State Street’s SPDR S&P 500 ETF Trust (NYSEARCA: SPY)

Over the course of its history, you could try all you want to call the tops and bottoms of each cycle, and you can blame the man in the White House all you want.

But here’s the truth:

Markets don’t move because of presidents — they move because of timing, policy, and economic cycles, which create patterns that appear political.

That distinction matters.

Because once you understand that:

• You stop chasing narratives
• You start focusing on probabilities
• You gain real trading context

This article breaks down the actual data behind presidential terms and stock market performance—without the political bias.

👉 Want more data-driven insights like this? Check out our full Trading Statistics hub.

Key Statistics – President vs Stocks

Here’s what the data shows at a high level:

• Average annual return under Democrats: ~10–11%
• Average annual return under Republicans: ~6–7%
• Best performing president: Bill Clinton (~16% annualized)
• Worst performing president: Herbert Hoover (-23% annualized)
• Election years: historically stronger than average
• Best year of presidential term: Year 3 (~13% returns 🔥)

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Trader insights:

• Markets tend to struggle early in presidential terms
• Volatility often increases during policy transitions
• Strong returns frequently follow market corrections and economic recoveries, not elections

U.S. Presidents vs Stock Market Performance (1929–2024)

Now, because we’re all data geeks here, let’s get straight to our first data table. The table below shows all the US Presidents between 1929 and 2026, their political affiliation, and annualized returns for the stock market.

President	Party	Years	Total Return	Annualized Return
Herbert Hoover	Republican	1929–1933	-62%	-23%
Franklin D. Roosevelt	Democrat	1933–1945	+198%	+9%
Harry Truman	Democrat	1945–1953	+87%	+8%
Dwight Eisenhower	Republican	1953–1961	+129%	+11%
John F. Kennedy	Democrat	1961–1963	+23%	+9%
Lyndon B. Johnson	Democrat	1963–1969	+43%	+6%
Richard Nixon	Republican	1969–1974	-27%	-6%
Gerald Ford	Republican	1974–1977	+40%	+12%
Jimmy Carter	Democrat	1977–1981	+28%	+6%
Ronald Reagan	Republican	1981–1989	+119%	+10%
George H.W. Bush	Republican	1989–1993	+51%	+11%
Bill Clinton	Democrat	1993–2001	+210%	+16%
George W. Bush	Republican	2001–2009	-40%	-6%
Barack Obama	Democrat	2009–2017	+182%	+14%
Donald Trump	Republican	2017–2021	+67%	+13%
Joe Biden*	Democrat	2021–2024	~+40%	~9–10%
Donald Trump**	Republican	2025-Present	~16-17%	~12-13%

*approximate
**so far, since we’re only currently about 1.25 years into the term

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Democrats vs Republicans — Who Performs Better?

Party	Avg Annual Return
Democrats	~10–11%
Republicans	~6–7%

At first glance, the conclusion seems obvious:

👉 Markets have historically performed better under Democrats

But here’s the nuance most sites miss:

This is largely due to timing of economic cycles, not policy alone. However, the numbers don’t lie and the stock market generally performs better when there’s a Democrat in the White House.

Why?

Because presidents often inherit:

• Recoveries
• Crises
• Inflation cycles
• Rate environments

And those factors matter far more than political affiliation.

Presidential Cycle Performance

Economic cycles, global geopolitics, and macro conditions all impact returns.

But in The Little Book of Stock Market Cycles, the focus shifts to where we are in the presidential term.

Here’s what the data shows:

Year of Term	Avg Return
Year 1	~6%
Year 2	~5%
Year 3	~13% 🔥
Year 4	~7%

👉 The third year consistently shows the strongest performance.

This aligns with:

• Stimulus policies
• Pre-election economic support
• Improving business sentiment

For traders and investors, the basic takeaway here is that when a new President is elected, they bring with them policy change and disruption to the status quo. That’s not necessarily a bad thing. But it generally takes the economy and the stock market a few years to adjust.

That’s why you’ll often see decent returns during a President’s first year in office. Most of the returns are carried on promises of change.

In year two, reality sets in, policies are changed, and the current economics of the nation are disrupted.

By year three, things start to stabilize, those first-year promises are put into action, and investments and other policy changes come to fruition, which leads to above-average returns throughout the rest of the President’s term.

Timeline Chart – U.S. Presidents vs the Stock Market

What Actually Drives Stock Market Returns

When it comes to data, it’s easy to look at two figures that are correlated and believe that one is causing the other. However, one of the most important things you’ll learn in economics and statistics classes is that correlation does NOT equal causation.

So, even though much of this data looks like stocks prefer Democrats over Republicans, or 3rd year vs 1st year Presidential terms… none of that really matters or can be used to accurately predict future returns.

It’s just data.

Conversely, stock market performance is driven by:

1. Federal Reserve Policy

• Interest rates
• Liquidity
• Inflation control

2. Business Cycles

• Expansion → peak → contraction → recovery

3. Major Crises

• Wars
• Financial crashes
• Inflation shocks

4. Starting Conditions

Presidents inherit environments.

Example:

• Barack Obama
  • Entered at the bottom of the 2008 financial crisis
  • S&P 500 return: +182% (~14% annualized)
  • Benefited from recovery + Fed stimulus
• George W. Bush
  • Dot-com crash + 2008 crisis
  • S&P 500 return: -40% (~-6% annualized)

👉 Same market. Completely different starting points.

What This Means for Traders

This is where this becomes actionable.

1. Volatility clusters in macro environments

Certain periods (crises, transitions, tightening cycles) create outsized moves on increased market volatility.

2. Election years = uncertainty → opportunity

• Increased volatility
• Narrative-driven price action
• More trading setups

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3. Cycles provide context, not signals

Presidential cycles won’t give you entries…

But they will:

• Improve timing awareness
• Help frame risk
• Add macro confluence to your trades

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Current Presidential Stock Market Performance – Donald Trump Vs. The Stock Market

Since the 2024 election cycle, the stock market has entered a new phase—marked by strong momentum followed by increased volatility.

Looking at the data so far:

S&P 500 Performance (2025–2026 YTD)

• 2025 return: +17.9%
• 2026 (YTD): ~0% to -2%
• Total return (combined): ~+16–17%
• Annualized return: ~12–13%

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What the Data Actually Shows

At first glance, these returns look strong—and they are. But just like with every presidency, context matters.

The market’s performance during this period is less about politics and more about where we are in the economic cycle.

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Key Drivers Behind Recent Market Performance

• Momentum from prior bull market (2023–2024)
• Interest rate expectations and Fed policy shifts
• AI-driven equity expansion (mega-cap tech leadership)
• Ongoing geopolitical and inflation uncertainty (2026)

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⚠️ Important: Correlation ≠ Causation

It’s easy to attribute stock market performance to a president—but that’s rarely accurate.

Markets don’t move because of presidents — but timing, policy, and economic cycles create patterns that appear political.

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How This Compares Historically

So far, this period:

• Is above long-term average returns (~8–10%)
• But still early in the cycle
• And already showing signs of volatility expansion

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Trader Insights

This is the part most people miss:

• Strong returns in 2025 = trend continuation
• Flat/volatile 2026 = cycle transition

👉 This is exactly the type of environment where:

• Volatility increases
• Narrative shifts dominate
• Short-term trading opportunities improve

Not surprisingly, this also lines up with our data that shows that 1st year Presidential terms are typically stronger than the 2nd year.

It’s too early to draw long-term conclusions. But one thing is clear:

The current market environment is behaving exactly how you’d expect during a late-cycle transition—not because of who is in office, but because of where we are in the macro cycle.

Final Takeaway

If you’re looking for a simple answer to: “Which president was best for the stock market?”

You might find a handful of data points. But you can’t draw any real conclusion. Instead, if you look at:

• Cycles
• Data
• Context

You’ll start to see patterns.

And that’s where the real edge is.

Frequently Asked Questions (FAQ)

Which U.S. president was best for the stock market?

Based on historical S&P 500 data, Bill Clinton delivered the strongest performance, with roughly +16% annualized returns during his presidency. However, this was largely influenced by the tech boom of the 1990s rather than presidential policy alone.

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Do Democrats or Republicans perform better for the stock market?

Historically, the stock market has produced higher average returns under Democratic presidents (~10–11%) compared to Republicans (~6–7%). That said, this is correlation—not causation—and is heavily influenced by economic cycles and starting conditions.

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Does the president actually affect the stock market?

Not directly. Stock market performance is primarily driven by:

• Federal Reserve policy
• Economic cycles
• Inflation and interest rates
• Global events and crises

Presidents can influence policy, but they don’t control market outcomes.

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What is the presidential cycle theory in the stock market?

The presidential cycle suggests that stock market returns follow a pattern during a president’s 4-year term:

• Year 1: Slower growth
• Year 2: Volatility
• Year 3: Strongest returns
• Year 4: Moderate performance

Historically, Year 3 has been the strongest, averaging around 13% returns.

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Are election years good for the stock market?

Election years tend to produce above-average returns, often due to increased government spending and efforts to stabilize the economy ahead of elections. However, they can also bring higher volatility.

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Why do some presidents have much better market performance than others?

It mostly comes down to timing. Presidents often inherit:

• Bull or bear markets
• Economic expansions or recessions
• Inflationary or low-rate environments

For example, Barack Obama entered office during the 2008 financial crisis recovery, while George W. Bush faced both the dot-com crash and the 2008 crash.

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Should traders use presidential data to make decisions?

Presidential data can provide macro context, but it should not be used as a trading signal. Traders benefit more from:

• Volatility patterns
• Earnings setups
• Market structure

Presidential cycles are best used as background context, not entry triggers.

Sources & References

All Star Charts. (2012, October 29). The little book of stock market cycles. https://www.allstarcharts.com/2012-10-29/little-book-stock-market-cycles/

Hirsch, J. A. (2012). The little book of stock market cycles: How to take advantage of time-proven market patterns. John Wiley & Sons.

Slickcharts. (n.d.). S&P 500 annual returns. https://www.slickcharts.com/sp500/returns

Standard & Poor’s. (n.d.). S&P 500 index historical data. https://www.spglobal.com/spdji/en/indices/equity/sp-500/

Federal Reserve Bank of St. Louis. (n.d.). S&P 500 index (SP500). FRED Economic Data. https://fred.stlouisfed.org/series/SP500

Multpl. (n.d.). S&P 500 historical prices and returns. https://www.multpl.com/s-p-500-historical-prices

Investopedia. (n.d.). Presidential elections and stock market performance. https://www.investopedia.com

Yardeni Research. (n.d.). Stock market performance by president. https://www.yardeni.com

CFRA Research. (n.d.). Stock market performance by political party.

*Note: Returns are based on S&P 500 total return estimates and may vary slightly depending on methodology, date ranges, and inclusion of dividends.