The Biggest Stock Rally Since FDR: Biden's First 100 Days

The stock market has been on a tear during President Biden's first 100 days, with the S&P 500 surging by 11% – the best performance by the index since Franklin Delano Roosevelt started his first term in 1933. This remarkable rally has astonished veteran observers and may have a ways to go, according to Greg Valliere, chief U.S. policy strategist at AGF Investments. But what specific factors contributed to the magnitude of this rally, and how does it compare to other post-inauguration periods, particularly under Democratic administrations?



Economic Recovery and Vaccine Rollout
The rapid rollout of vaccines and the subsequent reopening of the economy boosted consumer confidence and spending, leading to a surge in economic activity. This was evident in the strong economic growth data released in the first quarter, with the economy growing at an annual rate of 6.4% (Source: [NPR](https://www.npr.org/2021/04/28/991563667/u-s-economy-grew-at-6-4-annual-rate-in-first-quarter-as-vaccinations-ramped-up)).

Fiscal Stimulus
The passage of the $1.9 trillion stimulus plan by Congress poured more money into households and businesses, further fueling economic recovery and consumer spending. This stimulus package was a significant contributor to the market rally (Source: [NPR](https://www.npr.org/2021/03/11/976366662/biden-signs-1-9-trillion-covid-19-relief-bill-into-law)).

Monetary Policy
The Federal Reserve's commitment to keeping interest rates low and continuing bond purchases provided a powerful signal to investors, encouraging them to invest in the stock market. This monetary policy stance supported the market rally (Source: [NPR](https://www.npr.org/2021/03/17/978446663/fed-vows-to-keep-interest-rates-low-as-economy-recovers-from-covid-19)).

Corporate Earnings
Despite the challenges posed by the pandemic, many companies reported strong earnings, particularly in the technology sector. This positive earnings news contributed to the market rally (Source: [NPR](https://www.npr.org/2021/04/28/991563667/u-s-economy-grew-at-6-4-annual-rate-in-first-quarter-as-vaccinations-ramped-up)).



Market Performance Compared to Other Post-Inauguration Periods
Based on the information provided, the market's performance under President Biden's administration has been exceptional compared to other post-inauguration periods, particularly under Democratic administrations. The S&P 500 has surged by 11% in Biden's first 100 days, which is the best performance by the index since Franklin Delano Roosevelt started his first term in 1933. This remarkable rally has astonished veteran observers and may have a ways to go, according to Greg Valliere, chief U.S. policy strategist at AGF Investments. The strong performance can be attributed to the U.S. economy's rapid recovery, driven by the Biden administration's successful vaccine rollout and the passage of a $1.9 trillion stimulus plan.

Role of the Federal Reserve's Monetary Policy
The Federal Reserve's monetary policy played a significant role in driving the rally in the stock market during President Biden's first 100 days. The Fed committed to keeping interest rates low for the foreseeable future and continued to buy billions of dollars worth of bonds, providing a powerful signal to investors. This policy, known as quantitative easing, increased the money supply and lowered borrowing costs, making it cheaper for businesses to access capital and invest in their operations. Additionally, the Fed's forward guidance, which communicates its intentions for future monetary policy, reassured investors that the central bank would maintain accommodative policies, further boosting market confidence. These factors, combined with the rapid rollout of vaccines and the passage of a $1.9 trillion stimulus plan, contributed to the strong economic recovery and the subsequent rally in the stock market.

In conclusion, the stock market rally during Biden's first 100 days has been driven by a combination of factors, including the rapid economic recovery, fiscal stimulus, monetary policy, and strong corporate earnings. This rally has been exceptional compared to other post-inauguration periods, particularly under Democratic administrations. The Federal Reserve's monetary policy has played a significant role in supporting this rally, with its commitment to keeping interest rates low and continuing bond purchases providing a powerful signal to investors. As the market continues to evolve, investors should stay informed about the latest developments and consider the potential impact of various factors on the stock market's performance.