Stocks soared on Wednesday as President Joe Biden was inaugurated as the 46th President of the United States. And according to LPL’s Ryan Detrick, it was a historic day in more ways than one.
The S&P 500’s performance on Wednesday—when it closed up almost 1.4%—was the largest Inauguration Day pop since 1985, when the S&P 500 rose 2.3% on the start of President Ronald Reagan’s second term, according to LPL Financial data. It also handily beat the 0.3% jump experienced by the index during the inauguration of President Donald Trump in 2017.
What’s more, after Biden’s election, stocks gained 14.3% between Election Day and Inauguration Day, the biggest jump ever, topping that of President Hoover (13.3%) in 1929.
The Inauguration Day boost is a strong start to Biden’s presidency—at least as far as the markets are concerned. The trend follows on the steady gains experienced under Biden’s two most recent predecessors: up 13.8% annualized for President Obama and 14% annualized for President Trump.
“Of course, no one knows where we go from here, but with record monetary and fiscal stimulus, coupled with a huge re-opening later this year, a continuation of this bull market could be in the cards,” LPL’s Detrick wrote in a note Wednesday.
Indeed, stocks have recently been buoyed in part on hopes of another stimulus package to follow the $900 billion deal reached late last year, prompting optimism among some market-watchers. Charles Schwab’s vice president of trading and derivatives Randy Frederick recently told Fortune that he believes markets have been “looking to a potentially less divisive government [and] more economic stimulus, which seems likely going forward.”
President Biden recently detailed a $1.9 billion economic aid package that would include $1,400 stimulus checks, following on the $600 sent earlier in the year. But given the narrow Democratic majority in Congress and the influence of more moderate Democrats, some economists argue the plan has “a tough road ahead” and that a “pared down version of the package in the ballpark of $1 [trillion]” is more likely to pass by the end of March, economists at Bank of America wrote in a recent report.
Moving forward, the Street will be watching stock performance in the early days of the Biden administration. CFRA’s Sam Stovall points out that “since JFK, the S&P 500 gained an average 3.5% in the first 100 days of a new Democratic administration, rising in price for all five newly-elected presidents except Jimmy Carter,” he wrote in a Wednesday note.
Markets overall closed in the green Wednesday, with the S&P 500, Dow, and Nasdaq rising nearly 1.4%, 0.8%, and almost 2% respectively—all hitting record highs.