Deutsche Bank Research

Stocks usually see double-digit gains under U.S. presidents — with two exceptions since 1933. Deutsche Bank Research recently analyzed the S&P 500’s annualized total returns under each U.S. president since Theodore Roosevelt in 1901.

They found that the S&P 500 has generally experienced double-digit annualized returns under most presidents, with a few notable exceptions1.

For instance, the S&P 500 saw declines during the presidencies of Herbert Hoover, Richard Nixon, and George W. Bush. These periods were marked by significant economic challenges, such as the Great Depression, the 1973 oil shock, and the early stages of the global financial crisis 1.

On the other hand, some presidents, like Calvin Coolidge, oversaw periods of exceptionally high returns 1. The overall trend suggests that while presidential policies can influence market performance, broader economic events often play a more significant role.

Is there a specific president or period you’re particularly interested in?

Learn more: 1morningstar.com 2morningstar.com 3slickcharts.com

4macrotrends.net 5advisor.morganstanley.com 6macrotrends.net

With the U.S. presidential election just two weeks away:

Deutsche Bank Research found the S&P 500 has seen a long stretch of annualized double-digit returns under different White House administrations — with two exceptions since 1933.

“As we approach the big day, markets are bracing themselves for a vote that will likely lead to very different policies, depending who wins and with what congressional configuration,” said Jim Reid, global head of macro and thematic research at Deutsche Bank Research, in a note emailed Tuesday.

Yet it may be “better to be lucky than good,” said Reid, explaining that events might be more likely “to dictate big-picture market performance under the next president, with policy probably playing a smaller role.”

How the Stock Market Performed Under Each President

Deutsche Bank Research broke out the S&P 500’s annualized total return under each U.S. president dating back to Theodore Roosevelt in 1901. The link above shows the S&P 500 fell on an annualized basis under Herbert Hoover and Richard Nixon — declines that stood out against an otherwise long period of double-digit total returns no matter who was in the White House. The S&P 500 also fell on an annualized basis under President George W. Bush’s administration, the chart shows.

“From 1933 onwards, most presidents have benefited from a long period of U.S. exceptionalism and double-digit annual equity returns with just two very unlucky exceptions,” said Reid.

“The problem is these exceptions have tended to be pretty savage relative to the norm.”

But in Reid’s view, “the big outliers were driven by events that were arguably mostly outside of the control of the sitting president.”

Those events include “the [Great] Depression, the 1973 oil shock, and the double whammy of the post-2000 bubble unwind,” as well as the early global financial crisis seen under President George W. Bush, according to the note.

“Academics have argued that Hoover’s policies exacerbated the Depression,” said Reid, referring to the president who served from 1929 to 1933. “But you only have to look at the returns under” the preceding Calvin Coolidge “to see that he likely presided over a bubble that contributed to the subsequent 1929 crash, even if he had left office earlier that year.”

The S&P 500 had its highest annualized returns under President Coolidge and its worst performance during Hoover’s administration, the Deutsche Bank chart shows. “Hoover had a challenging legacy to deal with,” said Reid.

Thirteen of the last 15 U.S. presidents have presided over annualized total returns of between 10% and 17% for the S&P 500, he added. The S&P 500 performed in an “even tighter” range of 14% to 17% returns under seven of the last nine presidents, according to his note.

Deutsche Bank Research found that under President Joe Biden, the S&P 500 has so far seen an annualized total return of 14%. That compares with an annualized 16% total return under former President Donald Trump, whose administration spanned 2017 to 2021.

Election Day will be held Nov. 5, when Americans will vote on whether to send Vice President Kamala Harris, the Democratic nominee, or Trump, her Republican rival, to the Oval Office as the next president.

U.S. stocks are in a bull market that earlier this month marked its two-year anniversary.

The S&P 500 has jumped more than 22% so far this year based on its Tuesday afternoon level of around 5,854 That’s slightly below its record closing high of 5,864.67 notched Oct. 18.

The U.S. stock market was trading mostly higher Tuesday afternoon, with the S&P 500 about flat, the Nasdaq Composite rising 0.2% and the Dow Jones Industrial Average adding 0.1%, according to FactSet data, at last check.

Check out: Betting markets put chance of Trump win at 3-month high, but analysts express some skepticism

The stock market is a constellation of marketplaces where securities like stocks and bonds are bought and sold. Stock markets provide you with easy, transparent access to investment assets, and they help professional investors determine fair prices for public companies.

What Is the Stock Market?

Think of the stock market as the main financial venue where investing happens. It’s a collection of all the places where matches are made between buyers and sellers trading shares of public companies.

“The stock market” and “Wall Street” can refer to the entire world of securities trading—including stock exchanges where the shares of public companies are listed for sale and markets where other securities are traded. The New York Stock Exchange is the biggest stock market on earth.

Market indexes like the S&P 500 and the Dow Jones Industrial Average aggregate the prices of groups of stocks, which indicate the day-to-day performance of the stock market as a whole.

How Does the Stock Market Work?

The stock market helps companies raise money to fund operations by selling shares of stock, and it creates and sustains wealth for individual investors.

Companies raise money on the stock market by selling ownership stakes to investors. These equity stakes are known as shares of stock. By listing shares for sale on the stock exchanges that make up the stock market, companies get access to the capital they need to operate and expand their businesses without having to take on debt. In exchange for the privilege of selling stock to the public, companies are required to disclose information and give shareholders a say in how their businesses are run.

Investors benefit by exchanging their money for shares on the stock market. As companies put that money to work growing and expanding their businesses, investors reap the benefits as their shares of stock become more valuable over time, leading to capital gains. In addition, companies pay dividends to their shareholders as their profits grow.

The performances of individual stocks vary widely over time, but taken as a whole the stock market has historically rewarded investors with average annual returns of around 10%, making it one of the most reliable ways of growing your money.

Who Regulates the Stock Market?

The Securities and Exchange Commission (SEC) regulates the stock market in the U.S. The SEC was created after the passing of the Securities Act of 1933, following the stock market crash of October 1929. SEC regulations cover four main areas:

Stock exchanges
Brokers and dealers
Financial advisors
Mutual funds

The SEC’s mission is to protect investors, maintain fair, orderly and efficient markets, and facilitate capital formation. Thanks to SEC rules, companies that publicly trade on the stock market must tell the truth about their business, and those who sell and trade securities must treat investors fairly and with honesty.

Stock Market vs Stock Exchange

Although the terms are used interchangeably, the stock market is not the same as a stock exchange. Think of a stock exchange as a part of a whole—the stock market comprises many stock exchanges, such as the Nasdaq or New York Stock Exchange in the U.S.

When people talk about how the stock market is performing, they mean the thousands of public companies listed on multiple stock exchanges. And more generally, the stock market can be thought of as encompassing a very broad universe of bonds, mutual funds, exchange-traded funds and other securities beyond just stocks.

What Is a Stock Market Index?

A stock market index tracks the performance of a group of stocks that represents a particular industry or segment of the stock market, like the technology, energy and transportation sectors.

Often, one of three large indexes is used as shorthand to describe the performance of the U.S. stock market as a whole:

Dow Jones Industrial Average. The DJIA is made up of 30 blue-chip stocks of U.S. industrial companies.
S&P 500. The S&P 500 represents 500 of the largest companies in the U.S. economy.
The Nasdaq Composite. The Nasdaq Composite tracks the performance of more than 3,000 stocks listed on the Nasdaq stock exchange.

Other Types of Markets

The stock market generally refers to markets and exchanges where equity shares and related securities are traded. Other types of financial assets have their own markets.

Over-the-Counter Markets. OTC markets provide a venue for trading that takes place outside of major exchanges. OTC trades are primarily made directly between sellers and buyers, and prices may or may not be publicly available. Most bonds are traded OTC, and many stocks—including penny stocks—are also traded over-the-counter.
Commodities Markets. Raw materials like steel, coal and oil are traded on commodities markets. There are around 50 major commodity markets worldwide that facilitate trade in a wide range of commodities.
Derivatives. Derivatives are financial contracts like options whose value is tied to an underlying asset. These are essentially contractual bets about whether individual securities’ values will rise or fall. For experienced investors, derivatives can be extremely lucrative ways to hedge their bets when investing, and they can be incredibly risky for beginners.
Foreign Exchange Markets. Forex trading is a borderless, international market for exchanging currencies. Forex traders take advantage of the constantly fluctuating value of different currencies to make profits, and help provide liquidity for international trade.
Cryptocurrency. Bitcoin, Ethereum and other cryptocurrencies are traded on specialized crypto exchanges.

How to Invest in the Stock Market

If you want to invest in the stock market, the process to get started is easier than you think:

Decide what kind of account you want to open. From retirement savings to college savings, from short-term goals to long, there really is an investment account for everything.
Open a brokerage account. Once you’ve decided what kind of account you want, you’re ready to open an account at a provider called a brokerage. When choosing a company, consider their fees and available investment options.
Deposit money. To get started, you need to make an initial deposit. You can also set up recurring deposits to automate your investments going forward.
Choose your investments. Once your account is open, you can buy and sell securities. You can opt for individual stocks and bonds or mutual funds, index funds and exchange-traded funds (ETFs) that contain hundreds of individual securities. Many experts recommend a diversified, fund-based approach to minimize the risk any one bad investment loses you money.
Purchase your investments. Once you’ve settled on what you want to buy, simply enter the ticker symbol in the buy field and indicate how many shares you want to buy.