How Will the Stock Market Perform Under Trump’s Second Term?

When former President Donald Trump rang the opening bell at the New York Stock Exchange on December 12, 2024, speculation about his potential impact on the stock market was heating up. A statement by renowned Wharton professor Jeremy Siegel had reignited the debate, labeling Trump “the most pro-stock-market president” in U.S. history.

But what does history tell us? How did the stock market actually perform during Trump’s first term, and how might it fare in his second? This post keeps the original analysis from December 2024 and adds what has happened since.

Trump’s First Term: A Snapshot

During Trump’s first four years, the S&P 500 surged by 61.29%, marking one of the stronger performances for any presidential term in recent decades. This bullish momentum was bolstered by tax cuts, deregulation, and a pro-business agenda.

In comparison, President Biden’s administration had seen the S&P 500 climb by 57.88% from his inauguration in January 2021 to December 2024. While impressive, this slightly trailed Trump’s first-term growth at the same point in time. However, market gains often reflect broader economic conditions rather than purely presidential policies.

Historical Context: How Does Trump Compare?

For context, President Barack Obama’s first term saw the S&P 500 soar by a record-breaking 77.32% as the economy rebounded from the 2007–2009 recession. In contrast, George W. Bush faced a 25.65% decline during his first term due to the dot-com crash and 9/11.

Second Term Speculations: What’s Next for Markets?

Several factors of Trump's second term were expected to influence market performance:

Economic Policies: Trump’s first-term playbook of tax cuts and deregulation could return, potentially spurring corporate profits and stock prices. However, the broader economic climate, including inflation and interest rates, will play a key role.

Global Trade and Geopolitics: Trump’s tough stance on trade, particularly with China, created market volatility during his first term. Investors may brace for similar turbulence if trade wars from planned tariffs resurface.

Sector Impacts: Technology and energy stocks thrived during Trump’s presidency. A renewed focus on traditional energy and deregulation could again boost these sectors.

Should Presidents Get Credit for Market Gains?

Many analysts argue that presidents have limited influence over the stock market’s trajectory. Factors like Federal Reserve policies, global economic conditions, and corporate earnings often carry more weight. For example, the Federal Reserve’s rate hikes during Biden’s term have played a significant role in changing market trajectory. A president's stock performance may just boil down to luck of the draw, depending on alignment with economic and market cycles.

A Cautious Outlook

While Trump’s track record suggested the potential for strong market performance, the outlook in December 2024 remained uncertain amid shifting economic dynamics. The current AI boom is reshaping industries and propelling significant market gains, particularly in tech. However, this rapid technological advancement could also disrupt labor markets, spark regulatory scrutiny, and challenge traditional economic models. Combined with factors like inflation, geopolitical tensions, and fiscal policy, the economy faces an unprecedented landscape that will ultimately dictate the stock market’s returns for years ahead.

What Has Happened Since

The second term opened with a sharp test of the thesis. The S&P 500 fell nearly 20% in early 2025 around the April tariff announcements, then recovered to finish 2025 with a total return of 17.9%. From the 2024 election through September 2, 2026, the index gained more than 36%. Over the first year of the term, from inauguration to January 20, 2026, the S&P 500 rose about 13%, a weaker start than the first term's 24% first-year gain, with most of the 2025 return coming from profit growth rather than policy.

That pattern fits the caution in the original analysis. Trade policy moved markets, but so did earnings, the AI investment cycle, and Federal Reserve decisions. Presidential terms are a useful frame for comparison and a poor one for prediction. To run the comparison yourself, plot the S&P 500 on LuxAlgo's stock charts and measure each term from inauguration day. If you want to see how policymakers themselves trade, LuxAlgo's free, open-source Market Trackers turns congressional trade disclosures and other public records into searchable datasets.