New York
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The stock market in President Donald Trump’s first year again within the White House was the weakest of any president’s first year of a brand new term since 2005, when George W. Bush began his second term.
From Trump’s inauguration day to January 20, 2026, the S&P 500 rose 13.3% — wholesome good points by any commonplace. But it was the worst begin to a presidency in 20 years. In comparability, the S&P 500 gained 24.1% throughout the primary year of Trump’s first term, in accordance to CFRA Research.
Stocks climbed greater throughout the previous year, extending a bull run pushed by enthusiasm about synthetic intelligence. Meanwhile, worldwide shares outperformed the United States in 2025 for the primary time in years.
The stock market, in fact, doesn’t function in a vacuum. Trump’s second term got here on the heels of the S&P 500’s first back-to-back annual good points of more than 20% since the 1990s. The bar for additional good points was already set fairly excessive.
Still, this previous year has been marked by policy whiplash from the Trump administration.
Stocks slid to the brink of a bear market in April amid tariff uncertainty earlier than sharply rebounding as Trump backed off his most extreme threats. The S&P clinched 39 document highs throughout the year. In comparability, the index clinched 62 document highs in 2017, the primary year of Trump’s first term.
Trump seems to pay attention to the stock market’s efficiency and views the market as a barometer for his success. On Wednesday, he stated the recent stock market dip due to uncertainty about Greenland and tariffs was “peanuts” and the market would quickly be “doubled.” He backed off his tariffs later within the day, which despatched shares on a rebound.
US shares gained in 2025 amid enthusiasm about AI, optimism about Federal Reserve rate of interest cuts, company earnings that stay strong and an economic system that proved resilient. Trump in the summertime additionally signed his “One Big Beautiful Bill Act” into regulation. The stimulative impression of that coverage may present an extra increase to markets this year.
“The front-end loading of this stimulus is a big reason why the stock market did well the first year of this term,” Matt Maley, chief market strategist at Miller Tabak + Co, stated in an e-mail.
“This is also why many investors are thinking that the president wants to ‘let the economy run hot’ through the midterm elections,” Maley stated. “This does not mean that the second year will be as bullish for stocks as the first year, but there is little question that the administration wants to see a very strong stock market this year, especially in the 5-6 months leading into those midterm elections.”
The first year of Trump’s second term yielded solid gains and bouts of volatility. Wall Street’s worry gauge, the VIX, surged to traditionally excessive ranges within the spring amid the turmoil surrounding Trump’s tariffs.
“The only truly exceptional thing was that the VIX went over 50 for the first time since the pandemic during the height of trade policy uncertainty,” Nick Colas, co-founder at DataTrek Research, stated in an e-mail.
Tim Thomas, chief funding officer at Badgley Phelps Wealth Management, stated he’s adjusted some shopper portfolios to be extra “defensive,” or have much less publicity to dangerous belongings, however in the end is wanting previous short-term volatility and specializing in fundamentals like sturdy earnings progress, the AI growth and supportive fiscal coverage.
“The market performance last year was pretty good,” Thomas stated. “There is a lot of policy uncertainty out there. Policy uncertainty is hard to invest around, because, by its very nature, it can change in an instant.”
“You need to have some kind of hedge in place,” Thomas stated. “But the other key is just really staying focused on the long term and staying focused on the companies and their fundamentals. In the end, those are going to be the drivers of the returns.”
On the heels of three years of sturdy good points, Wall Street extensively expects the S&P 500 to climb greater once more this year. But uncertainty abounds. The US greenback continues to battle this year, whereas safe havens like gold and silver continue to hit record highs.
Jim Hagerty, CEO at Bartlett Wealth Management, informed NCS that his key takeaway from the previous year is for traders to keep disciplined.
“When markets have been really good, or occasionally when they’re scary, it can tempt people away from their disciplines,” Hagerty stated. “I would just emphasize: stay disciplined. And given how strong things have been, take a careful look at your asset allocation, make sure it’s suitable and rebalance if necessary.”