11/09/2017 04:59 EST | Updated 11/10/2017 08:42 EST

Wall Street grinds higher a year after Trump election rally

Donald Trump warned that the stock market was a "big, fat, ugly bubble" just weeks before he was elected. A year later, Wall Street remains on a milestone-shattering run that the president has been eager to tout and tweet about.

The Standard & Poor's 500 index, the broadest measure of the stock market, has notched 61 record highs and climbed 21.3 per cent in the year since Trump was elected.

That exceeds the S&P 500's gain in the first-term election anniversaries of all but two presidents since World War II: George H.W. Bush (21.7 per cent) and John F. Kennedy (27 per cent), according to CFRA Research.

It also outpaces the market's performance in the same postelection period of several other modern-era White House occupants, including Ronald Reagan (-3.3 per cent), Bill Clinton (10.3 per cent) and Barack Obama (3.9 per cent). But it trails the S&P 500's gain in the first year after the second-term elections of Clinton (31.7 per cent) and Obama (23.4 per cent).

The billionaire's surprise electoral victory initially set off a steep sell-off in Asian markets. But by the end of the day on Nov. 9, 2016, global markets had steadied and the S&P 500 index closed sharply higher. The market's rally continued for several weeks, driving the major U.S. stock indexes to record highs. This year, stocks have gradually moved higher, clocking new milestones for the indexes along the way.

Eight years into the bull market, investors have been betting that Trump and a GOP-controlled Congress will have a clear pathway to cut taxes, relax regulations and enact other business-friendly policies, despite legislative stumbles that have delayed the administration's efforts.

But Wall Street analysts credit the market's gains mainly to strong corporate profits.

"The most important thing that's happened is we've had very good earnings seasons," said JJ Kinahan, chief market strategist at TD Ameritrade. "Companies are making money. Earnings drive the market and earnings have been good."

Investors have also continued to bet big on economic growth in the U.S. and worldwide as economies in Europe and Asia have bounced back, Kinahan noted.

Since Trump's election, technology companies have led the way with a 39 per cent surge. Banks and industrial and basic materials companies have also soared. Only phone company stocks are down from a year ago.

During the first presidential debate between Trump and his Democratic rival Hillary Clinton in September 2016, Trump cautioned that the stock market was in bubble and that even a small increase in interest rates would bring the market "crashing down."

That's not happened, even though the Federal Reserve has been raised interest rates twice this year and is expected to do so again next month.

On average, the S&P 500 has continued "sailing along" for another year after a president's first-term election anniversary, before declining 10 per cent or more, said Sam Stovall, chief investment strategist at CFRA Research.

He notes that the shortest time was 36 days following Kennedy's first election anniversary, while the longest stretch was nearly four years after Clinton was elected.

"Should history repeat, and there is no guarantee it will, this bull (market) could continue to surprise investors with its resiliency," Stovall said.