Biden’s Presidency: A Look at Bidenomics and its Market Implications

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When President Joe Biden took office in January 2021, he inherited an economy deeply ravaged by a still-raging pandemic, 20.6 million unemployed Americans and thousands of businesses on the brink of bankruptcy.

However, his three years in office have seen new, optimistic progress in the U.S. economy. The U.S. job market is thriving, with unemployment declining to 3.7% from a previous high of 6.3%. This comes alongside a strong showing for the U.S. economy in 2023, with GDP growth of 2.5%, which outpaced many other developed nations.

The stock market and housing values have also reached record highs. All thanks to his administration’s legislative relief efforts, collectively known as the Bidenomics.

Aside from the country’s economic stability, it’s worth considering how Bidenomics affected stock market performance. Which sectors or demographics have been disproportionately affected, positively or negatively, by Biden’s economic agenda? What market trends should investors anticipate with a potential Biden reelection?

We’ll answer these questions below.

Bidenomics Timeline

Biden’s key economic agenda is often referred to as ‘Bidenomics’. The term first popped up in The Wall Street Journal and The Financial Times in June, but it wasn’t meant to be a compliment by either publication. Surprisingly, he turned it into a badge of honour. 

It follows a three-pronged approach: making public investments in the U.S., empowering middle-class workers and promoting business competition. This approach disagrees with trickle-down economics, which argues that tax cuts for the rich will eventually help everyone else.

‘Bidenomics is about the future. Bidenomics is just another way of saying: Restore the American Dream because it worked before.’

Take a closer look at the Bidenomics timeline, policies and their effect on the economy and stock market:


Biden faced one of the worst economic downturns in recent history when he began his term. As his first major legislative response to a faster economic recovery, he signed the American Rescue Plan Act of 2021 (ARPA) into law. US$1.9 trillion in economic recovery funds was aimed at addressing the impacts of COVID-19, including direct stimulus payments of US$1,400 checks per adult and extended unemployment benefits, among others.

Image source: Statista

According to The White House, it ‘drove the strongest 2-year job growth ever’, reduced healthcare costs by US$800 for more than 13 million Americans, helped more than 100,000 food establishments to stay open and more.

Moreover, a month after ARPA was enacted, U.S. News predicted that ARPA would bolster sectors that took a hit during the pandemic, such as cyclical stocks. Since the economy was expected to regain momentum, companies in sectors such as commodities—including copper and steel—would experience increased demands.

A study titled COVID-19 economic policy effects on consumer spending and foot traffic in the U.S. also suggests that the stimulus checks appear to directly increase spending in the short term. With vaccinations rising and restrictions easing, people felt freer to move around, spending on travel, entertainment and restaurants.

Another economic policy championed by Biden in the same year is called the $1.2 trillion Bipartisan Infrastructure Law, popularly known as the Infrastructure Investment and Jobs Act (IIJA). It aims to invest in transportation systems and other infrastructure like roads, bridges, airports and ports.

Source: Close Up Washington D.C.

This legislation has been expected to be a major boost for the infrastructure sector. In this context, analysts have mentioned companies like Caterpillar Inc. (NYSE: CAT) as potential beneficiaries. Caterpillar, a major player in the construction and mining equipment industry, is poised to see a boost thanks to a surge in infrastructure spending.

Here’s why: according to Wall Street analyst Jamie Cook, IIJA (US$500B+), Inflation Reduction Act (US$1T+), onshoring of semiconductor manufacturing (US$200B) and North America LNG (US$100B+) will bring in a whopping US$2 trillion to spend in the next five to ten years.

It shows why Caterpillar’s stock price might be on the rise. With shares already up 0.53% to $343.34, the expectation is that the company will see continued growth due to the substantial funding allocated for infrastructure projects.

Nucor (NYSE: NUE), the largest steel producer in the U.S., benefitted from the Senate’s approval of the bipartisan infrastructure package as well. The company’s chief executive claimed that they will help ‘rebuild the country’, driving the company’s shares up by 9.6% to $118.10 and marking an all-time high of $118.93 during the trading session.

They also became the top performer in the S&P 500 index on that day.


The following year, Biden signed the CHIPS (Creating Helpful Incentives to Produce Semiconductors) and Science Act of 2022 into law. It intends to improve the innovation, competitiveness and national security of the United States. 

The law appropriated US$280 billion over the next decade. A huge chunk of this funding, which amounts to US$200 billion, is for scientific advancements and commercialisation. An additional US$52.7 billion is dedicated to semiconductor manufacturing, research and developing a skilled workforce. 

US$24 billion in tax breaks are also included to incentivise chip production. Finally, US$3 billion is designated for programs focused on cutting-edge technology and wireless infrastructure.

Image source: McKinsey & Company

With the CHIPS Act funnelling money into the industry, it is a potential game-changer for certain semiconductor stocks. In fact, Intel Corp. (NASDAQ: INTC) shares surged by around 2.5% in pre-market trading after the U.S. government awarded them US$8.5 billion to ramp up chip manufacturing in the country.

Shares of chipmakers and their suppliers also surged after the Biden administration awarded a US$35 million semiconductor grant to defence contractor BAE Systems (LON: BA). 

The news resulted in a broader market response, as seen in the 3.4% rise in the PHLX Semiconductor Sector Index in December 2023, marking its highest level of the year. Shares of Intel (NASDAQ: INTC) and Advanced Micro Devices (NASDAQ: AMD) each gained 4.3%.

Even tech-stock experts believe the CHIPS Act will fuel long-term growth for semiconductor companies. 

‘Semiconductors power every industry in our breakthrough technologies megatrend. Even though we have seen these companies take some hits this year, we think it’s important to focus on the next three, five or 10 years. Over those time horizons, the opportunity is significant,’ says Jay Jacobs, the U.S. head of thematics and active-equity ETFs at BlackRock Inc.

The Inflation Reduction Act of 2022 (IRA) was also signed into law in the same year. It aims to curb inflation while also making investments in domestic energy production and reducing healthcare drug expenses. It is expected to generate US$739 billion in revenue, with a total investment estimated at US$433 billion. 

Of course, there are both winners and losers here. A market loser of the IRA includes companies doing buybacks. The new law puts a 1% tax on companies repurchasing their own stock (stock buybacks). Buybacks aim to raise the stock price by reducing available shares. 

It could hurt giants like Apple (NASDAQ: AAPL), which reportedly spent US$85.5 billion to repurchase shares and US$14.5 billion on dividends in its fiscal 2021.

Such measures can also have a huge impact on shareholders, too

In an email exchange with Money, AXS Investments CEO Greg Bassuk explained that shareholders of companies that pursue stock buyback programs could face losses. This is because ‘they will ultimately bear the burden of the 1% tax.’

Meanwhile, a winner of the IRA includes clean energy companies. The law invests US$369 billion in making America’s energy more secure. This includes giving tax breaks to people and businesses who switch to clean energy sources and electric vehicles.

A study published in Brookings called The Effect of U.S. Climate Policy on Financial Markets: An Event Study of the Inflation Reduction Act showed that the companies in the energy industry had different stock market reactions depending on their environmental friendliness.

It revealed that ‘green’ companies, those with lower emissions and better environmental practices, saw their stock prices rise when the IRA became likely to pass. Conversely, brown stocks, referring to companies in the traditional energy sector with high carbon footprints and pollution, experienced losses in value. This signals the potential shift in investor sentiment towards cleaner energy sources.


On June 3, 2023, Biden signed the Fiscal Responsibility Act of 2023 into law. The intention behind the law was to control spending and make changes to government programs. Here’s what it did:

  • Postpone the debt ceiling until January 2025.
  • Limit non-defence spending to US$704 billion for the fiscal year 2024. However, spending on Veterans Affairs (VA) healthcare was not included in this limit.
  • Cancelled about US$30 billion of unused funds for coronavirus relief.
  • Revoked US$1.4 billion of funding for the Internal Revenue Service (IRS).
  • Improve work requirements for the Supplemental Nutrition Assistance Program (SNAP) and the Temporary Assistance to Needy Families Program (TANF).
  • Simplified the process for environmental reviews for energy projects.
  • Ended the pause on student loan debt repayment in August 2023.

And while a tentative agreement between the White House and House Republicans to raise the debt ceiling has been reached, CNN reported the stock market might be slow to react. Investors, still worried by the previous debt ceiling drama, might wait for things to settle down before getting optimistic about this potential sign of fiscal responsibility. In fact, the immediate market impact could be bumpy.

Once a deal is signed, the Treasury will need to quickly replenish the cash it expended during the period when it couldn’t borrow additional funds.

According to Glenmede vice president of investment strategy Michael Reynolds, it will increase competition for investment in equities. As investors weigh their options, many might find the returns from investing in US Treasuries more appealing than stocks. As a result, this could temporarily drain liquidity from the stock market.

History reinforces caution. In 2011, a last-minute debt ceiling deal was followed by a credit rating downgrade and a two-month stock market slump.

Source: CNN

How The Policies Affect the Nation’s Economic Stability: A Statistical Comparison

President Biden’s economic records have been largely defined by COVID-19 and its aftermath. The crisis disrupted the job market, contributed to inflation levels not seen in decades and increased the federal debt by trillions of dollars.

The economy now looks very different from when Biden started his administration. The data clearly shows that his legislative efforts added 14 million jobs in under three years, lowered Black unemployment to a record low and reduced student loan debt by billions.

Let’s take a look at the key economic indicators to see how things stand.

Job Growth

The U.S. economy gained nearly 14.8 million jobs when Biden started his term, which is 5.4 million more than before the pandemic hit in early 2020. On average, that’s over 400,000 new jobs every month.

Image source:

The chart also shows that Biden’s monthly job growth is higher than that of other presidents, going back to Ronald Reagan. The closest comparison is Bill Clinton, who had an average monthly job growth of 239,000 during his two terms.

Unemployment Rate

In a Facebook post, Biden proudly announced that ‘unemployment has been under 4% for the longest stretch in more than 50 years.’

This is indeed accurate. According to the Bureau of Labor Statistics, the unemployment rate stayed below 4% for 18 months. This hasn’t happened since it remained under 4% for 27 straight months between 1967 and 1970.

The good news is, the strong U.S. labour market isn’t limited to just a few sectors or people. While big tech companies might be reducing their workforce, other sectors like restaurants and services are still in high demand. The unemployment rates for Black and Hispanic people are close to what they were before the pandemic hit in March 2020.

Image source: Reuters

Real GDP Levels

The gross domestic product (GDP) measures how well the economy is doing. When Biden became president in January 2021, the economy grew at about 3.4% each year until the end of the year. This growth was mostly because the economy naturally recovered from the COVID shutdowns, says economist Douglas Holtz-Eakin.

Last year, the economy grew by 2.5%, but some of the recovery had slowed down. The New York Federal Reserve expects 2.8% growth in the first quarter of this year.

Image source: Vox


Inflation remains to be a problem under the Biden administration. Prices shot up quickly after the pandemic, reaching the highest levels in over 40 years. People have felt the strain of increased expenses across the board, from groceries and gas to cars and healthcare.

Government statistics also show that food prices have increased by over 20% since the beginning of Biden’s presidency.

While inflation has eased a bit from last summer’s highs, prices are still around 3% higher than they were a year ago. This leads to Americans believing that these higher costs have negatively impacted their perception of the economy, consistently ranking inflation as their primary economic concern.

Image source: Washington Post

Stock Market Performance

Stocks have gone up significantly under President Biden, but not as much as they did under former President Trump.Here are the numbers: Between Biden becoming president and the end of 2023, the S&P 500 went up by 25.9%. During a similar time in Trump’s presidency, it went up by 42.3%, before the COVID-19 pandemic caused some problems. Former President Obama did even better, with the S&P 500 going up by 48.6% during the same period.

Image source: Axios

Post-Election Potential Market Trends

With Joe Biden continuing his economic policies from when he first took office, Biden will likely continue to steer the nation’s economy along the path he initially started. Here’s a glimpse into potential market trends post-election if he wins the seat:

  • Infrastructure-driven growth: One of the pillars of Bidenomics is a robust infrastructure plan. Expectations are high for increased government spending on infrastructure projects, which could improve sectors like construction, engineering and materials. This surge in investment is likely to stimulate economic growth, create jobs and potentially drive stock prices for companies involved in infrastructure development.
  • Green Energy Expansion: Biden’s commitment to fighting climate change is reflected in his plans for renewable energy. Continued support for clean energy initiatives, coupled with incentives for businesses to transition to sustainable practices, could fuel growth in the green energy sector. 

Investors should keep an eye on renewable energy companies, as well as those involved in electric vehicles and related technologies, as they’ll likely benefit from government policies to reduce carbon emissions.

  • Healthcare Reform: As of 2024, Biden’s healthcare reform focuses on making healthcare easier to afford for Americans, building upon the framework established by the Affordable Care Act (ACA). He plans to implement a similar option similar to Medicare to help people who can’t afford private insurance or don’t qualify for Medicaid.

The introduction of a Medicare-like public option may pose challenges for private insurance companies, as it may attract customers away from their plans. This could lead to uncertainty in the stock market for insurance companies as investors assess the potential impact on their bottom line.

Stricter rules on artificial intelligence could impact how much money these companies make and how much they can grow. This might make investors feel unsure about investing in tech stocks.

Investors also need to understand which investments fall under the new rule and how to follow it, which can be expensive and risky. According to a former Treasury official, this places a considerable burden on investors.

How To Navigate The Expected Market Fluctuations

Election season often brings with it a period of economic uncertainty. Different sectors and financial markets react to political shifts, and navigating these fluctuations requires a strategic approach. Here are three key steps to help you stay afloat:

Diversify Your Portfolio

Don’t put all your eggs in one basket. Diversification is the key to mitigating risk. Spread your investments across different asset classes like stocks, bonds and real estate. This way, if one sector dips, others might hold steady, minimising the overall impact on your portfolio.

Stay Updated With The Latest Market News

Knowledge is power. Keep yourself updated with the latest economic and political news that could influence the market. Regularly monitor your investments, check out what experts are saying and pay attention to how things might affect your investments.

Reliable financial news sources and reports from reputable financial institutions can be valuable resources.

Invest In Companies With Solid Fundamentals

Look for companies with solid fundamentals—a track record of profitability, strong management, sustainable business models and a focus on innovation. These companies are better equipped to weather temporary fluctuations and offer long-term growth potential.


Bidenomics has had a remarkable impact on both the U.S. economy and stock market performance. From stimulus packages to infrastructure investments, the policies implemented under President Biden’s administration have reshaped economic dynamics and influenced market trends.

Understanding these changes is important for investors looking to stay ahead in today’s dynamic market and capitalise on emerging opportunities.

At UOB Kay Hian, we can help investors stay informed about the latest political developments and their impacts on market trends. Stay ahead of the curve and leverage our expertise to make smarter investment choices.


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