On Jan. 20, President Donald Trump left office, leaving behind a complicated and controversial legacy. What is not disputed, however, is that the stock market rallied during his presidency, with the Dow Jones Industrial Average exceeding 30,000 for the first time in history.
Using the performance of shares of major publicly traded companies as a measure of the health of the economy is a highly contentious practice. Many have pointed to the seeming disconnect between the stock market and the economy, pointing to the fact that the Dow has been hitting record highs even as millions of Americans remain out of work and small businesses continue to struggle amid the now year-long COVID-19 pandemic.
Still, for some, the performance of the Dow Jones Industrial Average stock index is often used as a proxy for overall economic prosperity. The best known stock market index, the Dow tracks the value of 30 public company stocks that together represent all major industries except for transportation and utilities.
The U.S. economy is subject to complex, interconnected forces too innumerable for any one person to account for or anticipate. Still, when it comes to the health of the economy, the buck often stops at the president’s desk.
The Dow’s performance is not always directly linked to decisions the sitting commander in chief makes. More often, the direction of the index is attributable to factors beyond the president’s control, from geopolitical incidents to decisions made by the Federal Reserve or even a previous president.
The Dow’s performance has varied under each president. Under a handful of administrations, the DJIA dropped, dropping as much as 82%. Under the leadership of other presidents, the Dow more than tripled.
24/7 Wall St. reviewed the Dow’s performance under every president since the end of World War I, calculating the percent change in the index during each president’s term. We used non-inflation adjusted month-end closing values for each president’s first and last months in office.
While President Trump leaves office with a net gain in stocks, the market certainly went through some turbulence, including one of the worst stock market crashes in history. This is how the COVID-19 stock market crash in March compares to others throughout history.