New York
—
One yr after President Donald Trump’s reelection, the US stock market continues to notch record highs.
The S&P 500 has gained 19.6% over the previous 12 months, boosted by robust company earnings and buyers’ enthusiasm about synthetic intelligence. Stocks have been remarkably adaptable, defying issues a few resurgence in international commerce tensions and bouts of intense volatility.
To Trump, the market’s positive factors are a vindication of his insurance policies. The president on October 27 touted shares’ report highs whereas talking to a crowd with Japanese Prime Minister Sanae Takaichi.
“Their stock market today and our stock market today hit an all-time high,” Trump said. “That means we’re doing something right.”
But some analysts say the stock market’s positive factors have a extra prosaic purpose: Corporate earnings proceed to impress Wall Street, and buyers are betting huge on AI.
In reality, the market’s resilience has been stunning, stated Jed Ellerbroek, portfolio supervisor at Argent Capital Management, contemplating Trump’s “pretty aggressive changes and approaches” to tariffs and the Federal Reserve, which he has pressured to decrease rates of interest.
“Trump’s introduced a lot of uncertainty into markets over the last year,” Ellerbroek stated. “The market hates uncertainty.”
Investors have turned their consideration to company America’s earnings and tried to look previous issues about tariffs, he stated.
Technology has made that simpler to do, he stated, as a result of “this AI investment cycle is humongous and unprecedented and overwhelming any and all of those things.”
The S&P 500, which is weighted by market worth, has develop into more and more concentrated in huge tech firms. Nvidia (NVDA), which simply hit $5 trillion in market worth, now accounts for 8% of the S&P 500’s market worth.
An equal-weighted model of the S&P 500, which supplies all the businesses within the index an equal half, is up simply 6% over the previous 12 months, in comparison with the benchmark index’s 19.6% achieve.
The S&P 500 fell as a lot as 19% in April as Trump rolled out his plan for tariffs. But as markets tumbled, the Trump administration walked again its most extreme proposals.
Since then, the S&P 500 has coasted larger. The index is up six months in a row.
“Stocks may be higher in part because the administration’s final tariff actions were ultimately less severe than initially feared,” stated Mark Malek, CIO at brokerage agency Siebert Financial. “Were it not for the tariff-driven swoon earlier this year, markets would likely be even higher today.”
The Treasury market has additionally superior. Despite issues about US deficits, Trump’s “One Big Beautiful Bill Act” and assaults on the Fed’s independence, buyers have nonetheless flocked to US authorities bonds.
The 10-year US Treasury yield, which influences a bunch of rates of interest throughout the economic system, has declined from 4.4% in November 2024 to 4.1% this month.
Wall Street’s concern gauge, the CBOE Volatility Index, has signaled relative calm in markets for almost all of the previous six months. An index monitoring volatility within the bond market is hovering close to its lowest degree this yr.
“We want the most America-first policies that are possible, without incurring market wrath,” Treasury Secretary Scott Bessent instructed the Financial Times in an interview in October.
“What gets the people in trouble is they come in, they have these ideas, but they don’t respect the market … you’ve got to respect the market,” Bessent stated.
When Trump was reelected, buyers cheered the potential for deregulation and tax cuts, whereas the Fed had lately lower rates of interest, offering a lift for shares.
Ross Mayfield, an funding strategist at Baird, stated he has not been shocked by the stock market’s ascent.
“The administration has largely delivered on a lot of those things that investors were so bullish about,” Mayfield stated.
“Ultimately you zoom back and you say, ‘All right, it’s an AI bull market,’” Mayfield stated. “The administration took the baton from the last administration only two years into a bull market, still with a lot of leg room left and companies growing their earnings.”
From Trump’s election via the top of October, the S&P 500’s rise was the eighth finest for a president’s first yr because the finish of World War II, in line with CFRA Research information. The S&P 500 climbed roughly 38% throughout the identical interval throughout President Joe Biden’s time period, marking the very best efficiency on report.
And the US stock market’s positive factors pale compared to international markets. In South Korea, the benchmark Kospi index has soared 66% throughout the previous 12 months. Hong Kong’s Hang Seng index has gained 28%. Benchmark stock indexes in Poland and Greece have gained 52% and 60%, respectively.
“What’s happening in Washington matters, but it’s not the only thing that matters,” stated Keith Lerner, chief market strategist at Truist. “The North Star of this bull market is corporate profits.”