Joe Biden’s Presidency: Impact on the SP 500’s Surging Performance Since November 2020

It is often debated whether a president can directly influence the stock market, but since November 2020, the SP 500 has shown a significant surge. This article explores the relationship between Joe Biden’s presidency and the market performance, distinguishing between direct and indirect influences.

Understanding the Impacts on the SP 500

The surge in the SP 500 is undeniable. Since Joe Biden's election, the market has seen dramatic increases, making it difficult to ignore the correlation. However, attributing this growth solely to the president’s policies is challenging. A study by the Stanford Center for Research in Finance and Control suggests that the recent performance of the SP 500 could be more attributed to global economic recovery and fiscal stimulus rather than singular presidential actions.

Role of Inflation and Economic Policies

One significant factor influencing the market is inflation, a result of Biden’s economic policies. His administration has implemented measures to combat the economic impacts of the pandemic, including stimulus packages and spending initiatives. While these actions are aimed at stabilizing the economy, they also contribute to inflation, making the purchasing power of the dollar lower. This means that more dollars are needed to buy the same amount of stock.

Stabilizing the Market

Despite concerns, Joe Biden has taken steps to stabilize the market rather than causing it to fluctuate wildly. Unlike former president Donald Trump, Biden has provided clear and consistent guidance on fiscal policies, including higher taxes on businesses. This has given companies time to adapt and prepare for changes, reducing market volatility. In contrast, Trump’s frequent and often contradictory tweets about the market created unnecessary panic and volatility.

Critical Perspectives and Future Outlook

The USD’s value has been steadily declining since Biden took office, leading some to speculate about the future of the U.S. dollar and the stock market. Critics argue that impending 'insane policies' may lead to further inflation and currency devaluation. However, the Securities and Exchange Commission (SEC) reports that, based on current trends, the SP 500 is expected to continue growing, though at a potentially slower pace.

Concluding Remarks

The correlation between Joe Biden’s presidency and the SP 500’s growth is complex and multifaceted. While certain economic policies have contributed to market stability and growth, the primary drivers of the SP 500 remain global economic trends, fiscal stimulus, and market fundamentals. Future performance will depend on how effectively these policies are implemented and managed.