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Here's What The Markets Did On The First Day Of Biden's Presidency

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Here's What The Markets Did On The First Day Of Biden's Presidency

Stocks experienced a volatile, unpredictable and overall positive four years under President Donald Trump.

On Wednesday, Joe Biden was officially sworn into office as Trump’s successor, and the SPDR S&P 500 ETF Trust (NYSE: SPY) traded higher by 1.4%.

What Happened? The S&P 500 finished the Trump era on a high note on Tuesday, gaining 0.9% to get within 0.7% of its all-time closing high. But the rally continued on Wednesday as Biden was sworn into office as the 46th U.S. president.

The S&P 500 closed at 3,851.85, while the Dow closed up 257 points at 31,188.38.

See Also: How The Markets Performed On The Last Day Of Trump's Presidency

Why It’s Important: Critics of Biden’s policy approach were concerned that the Democratic agenda of higher corporate tax rates and more stringent regulations could weigh on corporate profitability and stock prices. However, investors appear to be optimistic about the potential impact of Biden’s proposed $1.9 trillion stimulus package, which includes $1,400 direct payments for individual Americans.

Investors are also optimistic about the potential for Biden to normalize international trade relations, particularly with China. China is the largest U.S. trading partner, but Trump’s trade war resulted in a number of new tariffs between the two nations and an environment of unpredictability for investors.

Investors are hopeful Biden will take a more systematic and measured approach to the ongoing pandemic, especially now that multiple vaccines have been greenlighted by the FDA. While the stock market has bounced back to new highs from its March 2020 lows, job losses have lingered, economic shutdowns and restrictions persist and pandemic deaths remain elevated.

Benzinga’s Take: From Election Day 2016 to Election Day 2020, the S&P 500 rallied 57.4% overall in the Trump era. However, investors seemingly have high expectations for President Joe Biden given the S&P has rallied another 14.3% since Biden won the election in November.

Joe Biden. Benzinga file photo by Dustin Blitchok.

 

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