The S&P 500 Under Every President Since Reagan: Returns Side by Side

The S&P 500 has produced wildly different returns across the eight presidents who served between 1981 and 2026. Bill Clinton presided over the highest annualized return of any modern president (+15.2%). George W. Bush presided over the lowest (-4.4%). The data alone is striking, even before you consider the policy and macro context that actually drove those returns.

Three things to say up front. First: presidents do not control the stock market. They influence it through tax policy, regulatory approach, fiscal spending, and the appointments they make to the Federal Reserve and Treasury, but the timing of business cycles, the global macro environment, and the prior administration's policies all matter as much or more. Second: the start date matters enormously. A president who takes office at a market peak inherits worse return mechanics than one who takes office near a trough. Third: dividends and inflation matter. The numbers below are price-only S&P 500 annualized returns; total return with dividends runs roughly 1.5-2% higher.

The Side-by-Side Numbers

*Through April 2026, year 1.5 of the second Trump administration. Numbers volatile and not yet representative of full term.

Why Clinton Got the Best Return

Clinton (1993-2001) had the most fortunate combination of any modern president: he took office at a low valuation (S&P 500 P/E around 15), benefited from the productivity gains of the early internet, and rode the 1990s expansion to the dot-com peak. The 1990s were the single best decade for U.S. equities since the 1950s. His policies (1993 tax increase, 1996 welfare reform, 1997 capital gains cut, 1999 Glass-Steagall repeal) had real effects but the macro tailwind was the dominant factor.

Why George W. Bush Got the Worst Return

Bush (2001-2009) inherited a market just past the dot-com peak, suffered through the dot-com unwind, the 9/11 selloff, and then exited through the worst financial crisis since the Great Depression. The timing was spectacularly bad. Even a "neutral" president would have produced negative returns over that span. Bush's policy contributions (2001 and 2003 tax cuts, financial deregulation that contributed to the 2008 crisis) had directional effects but the cycle dominated.

The Awkward Pattern: Democrats Have Done Better Recently

The numbers since Reagan show an uncomfortable pattern for the political analysis: Democratic presidents have produced higher annualized S&P 500 returns than Republicans on average over the last 45 years. Specifically:

• Democratic presidents (Clinton, Obama, Biden): +13.5% annualized average
• Republican presidents (Reagan, GHW Bush, GW Bush, Trump 1st term): +7.7% annualized average

Most economists and financial analysts caution against drawing political conclusions from this. The cycle timing matters more than the party. Clinton inherited a recovering economy after the 1990 recession; Bush inherited the dot-com peak. Obama inherited a market bottom; Trump 1st term inherited a 7-year-old bull market.

The honest read of the data: presidents matter less than the cycle they inherit, and timing matters more than ideology in determining S&P 500 returns over a 4-8 year window.

What This Tells You About Investing Around Elections

Practical implications for investors:

1. Selling because your party lost is expensive. Every political administration produces some good days and some bad days. The investor who sat out 2017-2021 because Trump was president missed a 69% rally. The investor who sat out 2009-2017 because Obama was president missed a 182% rally. Conviction-based market timing is almost always more expensive than staying invested.

2. Sector concentration changes more than total returns. Energy and defense did better under Republican administrations. Renewables and healthcare did better under Democratic administrations. But the broad index returns are dominated by macro cycles, not policy.

3. The first year is usually less important than the rest. Year 1 of any administration tends to be policy-uncertain. Year 2-4 is when the policy effects (tax changes, deregulation/regulation, spending) start showing up in earnings.

What This Does Not Tell You

A few things this analysis cannot answer:

• Whether one president's policies caused the returns or whether they were inherited. Almost always: a mix.
• What returns would have been under a different president in the same period. Counterfactual analysis is impossible.
• What returns will be under future presidents. Past returns tell us about cycles and timing, not about future presidential success.

The Bottom Line

S&P 500 returns under the eight presidents from 1981 to 2025 ranged from -4.4% annualized (G.W. Bush) to +15.2% annualized (Clinton). The variance is mostly explained by which point in the macro cycle the president took office, not by ideology. The trade you cannot execute is "investing only when your party is in office." The trade that has worked over every president, every cycle, and every starting point is staying invested.

For more on staying invested through volatility, see our analysis of what happens if you never panic sold and the worst times to invest.