Trump said the stock market would crash if Biden won. The Dow just had its best month since 1987.

President Donald Trump repeatedly warned Americans that if they failed to reelect him, the stock market would implode. In reality, the opposite happened.

Between August and October alone, Trump sent six tweets saying markets would “crash” if Joe Biden were elected, using a word presidents typically avoid.

“The Dow Jones Industrial just closed above 29,000! You are so lucky to have me as your President,” Trump wrote on September 2. “With Joe Hiden’ it would crash.”

Yet no post-election meltdown emerged. If anything, markets melted up as nightmare election scenarios were avoided and investors celebrated coronavirus vaccine breakthroughs from Pfizer and Moderna.

The S&P 500 notched its best election week rally since 1932. And despite a sharp pullback Monday, the Dow soared nearly 12% in November, its best month since January 1987. The S&P 500 and Nasdaq enjoyed their best month since April.

“In terms of Biden being bad for the market, we can already see the opposite is true,” said Daryl Jones, director of research at Hedgeye Risk Management.

Wall Street has moved on from Trump

There’s no doubt that Trump’s tax cuts and deregulation helped boost markets. His trade war with China and love of tariffs, however, were clear negatives for stocks.

Biden is signaling he won’t adopt extreme policies that would rattle markets. His economic team, unveiled Monday, is headlined by Janet Yellen, the crisis-tested former Federal Reserve chair with whom investors are very comfortable.

“Biden is showing us that from a business and economic standpoint, he’s likely to be moderate,” Jones said.

The strong November performance on Wall Street partially reflects relief that the election removed a huge cloud of uncertainty, even if the votes took time to count. Before the election, there were serious concerns about a constitutional crisis and the transfer of power. But investors have largely shrugged off Trump’s avalanche of election-related lawsuits as a sideshow doomed to fail.

“The fear was there would be a seriously contested election,” said Kristina Hooper, chief global market strategist at Invesco. “Certainly, it’s being contested but there’s a recognition there’s a very, very slim chance that President Trump will actually succeed in his bid to overturn the election results.”

Gridlock beats blue wave

Even better from Wall Street’s perspective, the election failed to produce the blue wave Democrats hoped for.

Democrats would need to win both Georgia runoff races in order to get control of the Senate, with Vice President-elect Kamala Harris breaking a 50/50 tie.

Republicans are the heavy favorites to retain control of the Senate, according to PredictIt, an online prediction market.

Divided government in 2021 means Biden won’t be able to raise corporate and personal taxes, a huge relief to investors. It will also limit the ability of Democrats to pass sweeping climate legislation.

Markets are focused on ‘game changer’ vaccines

The celebration on Wall Street comes even as the suffering mounts on Main Street.

The pandemic returned this fall with a vengeance, with coronavirus infections and hospitalizations at record highs. Health restrictions are back, and federal relief is expiring.

All of this is hammering mom-and-pop shops, movie theaters, hotels, airlines and restaurants. Jobless claims have climbed in back-to-back weeks and the government jobs report due out on Friday is expected to show hiring slowed in November.

But investors are looking past the worsening pandemic and focusing instead on enormous progress on vaccines.

“The vaccine news is a real game changer,” said Hooper. “The stock market has this great ability to look through immediate headwinds to a future that appears brighter.”

Moderna said Monday that its vaccine is 100% effective against severe Covid-19. That’s a huge positive given that just a few months ago there were concerns whether an effective vaccine could ever be developed.

Now, there is greater confidence of a stronger economic recovery in 2021 that will include hard-hit sectors like travel.

Bank of America economists predict global GDP will surge by 5.4% in 2021, the best year since 1973. US GDP is expected to increase by 4.5%, the strongest since 1999.

“A year of vaccine not virus, a year of reopening not lockdown, a year of recovery not recession,” Michael Hartnett, chief investment strategist at Bank of America, wrote in a note Monday.

The gap between rich and poor is getting wider

The market boom sends a positive signal that can encourage nervous consumers and corporations to spend instead of hunker down. That, in turn, can boost the real economy.

Yet the V-shaped recovery on Wall Street is another example of how the pandemic is worsening inequality. That’s because millions of Americans don’t get a boost from the market boom.

Only about half (52%) of American families have some level of investment in the market, mostly through 401(k)s and other retirement accounts, according to the Pew Research Center. Just 14% of households are directly invested in the market.

And the surging stock market is likely exacerbating the divide between rich and poor because affluent families have far more skin in the game.

As of the first quarter of 2020, the wealthiest 10% of American households owned 87% of all stocks and mutual funds, according to the Federal Reserve. The middle class, by contrast, owned just 6.6% of stocks, according to NYU professor Edward Wolff.

No matter who owns stocks, markets can’t go up forever.

At some point, the vaccine optimism will all be priced in. The epic rebound on Wall Street — the S&P 500 is up a stunning 61% since the March 23 low — has driven up market valuations to levels unseen since the dotcom bubble.

Bank of America’s Hartnett argued it would be “silly to think big stock market gains from here” won’t cause negative responses, including higher inflation, higher taxes and higher bond yields. That’s why he’s advising clients to “sell into strength on vaccine in coming months.”

“We expect peak prices in early ’21,” Hartnett wrote.