If you spent the last four years watching the news, you probably think the stock market under Biden was a non-stop roller coaster of "inflation did this" and "the Fed did that." Honestly, it’s kinda exhausting to keep up with. But now that we’ve got the rearview mirror polished, the actual numbers tell a story that's way more interesting than a 30-second soundbite.
Basically, if you had just stayed the course and ignored the doom-scrolling, you would’ve done pretty well. Between January 20, 2021, and January 20, 2025, the S&P 500 returned over 65%. That’s not a typo. Despite the 2022 bloodbath where the market dropped nearly 20%, the recovery was so aggressive that the "Biden years" ended up being a massive win for the patient investor.
The Stock Market Under Biden: A Tale of Two Halves
The first half of the term was basically the "stimulus hangover." We had low rates and government checks flying everywhere. The S&P 500 shot up. Then, 2022 hit like a ton of bricks. Inflation spiked to 40-year highs, and the Federal Reserve started hiking interest rates at a pace that made everyone’s head spin.
You’ve probably heard that high rates kill stocks. Usually, they do. But something weird happened in early 2023. While everyone was bracing for a recession that never quite showed up, a little thing called ChatGPT launched. Suddenly, the stock market under Biden wasn't just about inflation anymore; it was an AI arms race.
The Massive Winners (The "NVIDIA Effect")
When you look at the top performers, it’s basically a list of companies that build the "brains" for AI.
- NVIDIA (NVDA): Up about 930%. Just insane. It went from roughly $13 to $137 in four years.
- Super Micro Computer (SMCI): Jumped over 800%.
- Vistra Corp (VST): This one surprises people. It’s a power company, but because AI data centers need so much juice, their stock surged nearly 780%.
It wasn't just tech, though. One of the biggest ironies of the stock market under Biden was the energy sector. Even with all the talk about green energy, the energy sector was actually one of the top performers during his term. Traditional oil and gas companies like Targa Resources (up over 680%) made a killing as global demand stayed high and supply stayed tight.
What Really Drove the Returns?
It’s tempting to give a President all the credit (or all the blame) for the market. But markets are complicated. Most experts, like David Russell from TradeStation, point out that while the Inflation Reduction Act boosted industrial activity, the AI boom was largely its own beast.
The Biden administration’s policies did provide a "floor" for certain industries. The Infrastructure Investment and Jobs Act poured billions into roads, bridges, and broadband. If you were holding industrial stocks or construction-adjacent companies, you saw a steady lift. But let's be real: the Fed’s fight against inflation was the main event.
By the end of 2024, the S&P 500 was posting back-to-back double-digit gains. The Dow Jones was up more than 39%, and the Nasdaq—the home of tech—advanced nearly 46%. It wasn't always smooth. It was messy. But it was profitable.
Realities vs. Expectations
People often get the "vibes" of the economy mixed up with the "reality" of the stock market. You might have felt like things were tough because the price of eggs went up (inflation peaked around 9% in mid-2022), but the companies in the S&P 500 were still growing their earnings.
- Inflation peaked, then cooled. By December 2025, the CPI was down to 2.7%.
- The "Recession" that never was. Countless "experts" predicted a crash in 2023. It didn't happen.
- Earnings held up. Corporate America proved to be way more resilient to high interest rates than the bears expected.
The 2022 Dip: Why It Didn't Kill the Bull
If you sold your 401(k) in June 2022, you missed the greatest part of the Biden-era rally. That year was brutal. Bonds and stocks both fell together—which almost never happens.
The pivot happened when the market realized the Fed wasn't going to break the economy to fix inflation. As soon as the "soft landing" became a possibility rather than a dream, stocks took off. This "climbing the wall of worry" is a classic market move. The stock market under Biden was defined by this exact resilience.
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Actionable Insights for the "Post-Biden" Era
The transition into 2025 and 2026 has brought its own set of headaches—like the "tariff tantrums" and new trade uncertainties—but the lessons from the last four years still apply.
First off, ignore the political noise. If you had avoided the market because you didn't like the guy in the Oval Office, you would have missed a 65% gain. The market doesn't care about your political party; it cares about earnings and interest rates.
Second, diversify beyond just "Big Tech." While NVIDIA was the star, the fact that utility companies like Vistra performed so well shows that the AI trade has ripples. You don't just need the chips; you need the electricity to run them.
Lastly, keep an eye on the 10-year Treasury yield. It’s been hovering around 4% lately. If that starts spiking again, the stock market will get twitchy. But as we saw from 2021 to 2025, the U.S. economy can handle more than we give it credit for.
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Your Next Steps:
- Review your sector weightings: Are you too heavy on tech after the recent run-up?
- Check your "AI-adjacent" holdings: Look at utilities and infrastructure, not just chipmakers.
- Rebalance your 401(k): If you haven't touched it in four years, your "winning" stocks might now be a dangerously large part of your portfolio.