Americans are deeply divided on most issues as they head to the next general election in November this year. However, they are united on the economic issue, which is the most important part of the economy.

Joe Biden and Donald Trump are the frontrunners in their respective parties. Still, it is unclear whether this year’s election will be a repeat of what happened in 2020. Joe Biden is 81 years old and could drop off while Donald Trump faces 91 counts and he could be found guilty of some of these crimes.

There are various ways of looking at Biden’s and Trump’s economic policies. One of the most popular approaches is to look at the stock market performance in their two terms. 

Stock market returns under Biden

The stock market has done well during the two presidencies. The S&P 500 and Nasdaq 100 indices have jumped by 26.3% and 19.7%, respectively during Joe Biden’s presidency, as shown below.

SPY vs QQQ in Joe Biden’s presidency

US equities were already rising when Joe Biden took over from Trump on January 20th. This rally continued rising and then crashed hard in 2022. They then rebounded in 2023 and are now sitting at their all-time high.

Stock performance under Trump

The stock market had a stronger performance between his swearing-in on January 20th 2017 and January 6th, 2020. The S&P 500 index was up by over 50% while the Nasdaq 100 index soared by over 76%. This rally happened as investors cheered Trump’s deregulation policies and tax cut policies.

SPY vs QQQ in Trump’s presidency

Still, Trump’s and Biden’s terms are significantly different. For one, interest rates were at different levels in the same period. In Trump’s first term, interest rates were at a record low of between 0% and 0.25%. In Biden’s case, interest rates were up by between 5.25% and 5.50%, the highest point in more than two decades.

Trump’s stock market bull run was halted by the COVID-19 pandemic, one of the biggest black swan events on record. In the aftermath of this crisis, US equities dipped sharply as the pandemic started. They then rebounded as the Trump administration unveiled stimulus packages and as the Fed pivoted.

In all, the American economy has done well during Trump’s and Biden’s presidency. The unemployment rate has remained low while earnings growth has been continuing. Biden’s gains were mostly because of his expansive government spending. He launched a $1 trillion infrastructure spending, a $500 billion Inflation Reduction Act (IRA), and a $280 billion CHIPS and Science Act.

Biden and Trump have also put the American economy at risk by growing the total public debt. Trump added the total debt by $9 trillion by cutting taxes and by providing Covid stimulus. Biden has added trillions to the national debt, adding $10 billion per day since taking office.

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