Investors will closely monitor stock markets on Tuesday, the day after Donald Trump is inaugurated for his second term in the White House, to see if U.S. equities can continue their recent trend of posting gains after a president is sworn in.
Historically, the benchmark S&P 500 stock index has not performed well on average on inauguration day, or the day after if the inauguration falls on a market holiday. However, the last three inaugurations have all resulted in market gains.
Trump's first inauguration in 2017 was met with a 0.34% gain for the index. The S&P 500 rose 1.39% on the day Joe Biden was sworn in as president, the largest inauguration gain for the index since Ronald Reagan's second inauguration in 1985.
Longer term, the index has logged an average decline of 0.27%, according to data going back to 1949.
For the Dow Jones Industrial Average, the average decline is 0.24%. The Nasdaq Composite, which was launched more recently, has logged an average decline of 0.35%.
The following table shows percentage changes for inaugurations from President Harry Truman on.
* Market closed, market reaction from first trading day after inauguration.
** The S&P 500 was launched in March 1957, but S&P Dow Jones Indices provides back-tested data for dates that precede its launch
*** Performance for Gerald Ford, who was sworn in on Aug. 9, 1974, following Nixon's resignation, not included.
**** Performance for initial swearing-in of Lyndon B Johnson, which occurred on Nov. 22, 1963, following Kennedy's death, not included.
