Trump’s stock market: Poorest first-year performance for a president since George W. Bush

Wall Street’s Performance in Trump’s Second Term: A Year in Review

As morning commuters made their way past the New York Stock Exchange on January 20, 2026, the S&P 500 had posted a 13.3% gain during President Donald Trump’s first year back in office. While this increase is solid by most measures, it marks the weakest first-year performance for a president’s new term since George W. Bush’s second term began in 2005. By comparison, Trump’s initial year in office saw the S&P 500 surge by 24.1%, according to CFRA Research.

Throughout the past year, the stock market continued its upward trajectory, fueled by excitement over advancements in artificial intelligence. Notably, international equities outpaced U.S. stocks in 2025 for the first time in several years.

The market’s momentum did not exist in isolation. Trump’s return to the White House followed two consecutive years where the S&P 500 delivered annual returns exceeding 20%—a feat not seen since the 1990s. This set a high benchmark for further growth.

Nevertheless, the year was characterized by abrupt policy shifts from the Trump administration. In April, uncertainty surrounding tariffs pushed stocks to the edge of a bear market, but a swift reversal in policy led to a strong recovery. The S&P 500 achieved 39 record closes during the year, though this was fewer than the 62 records set in 2017, Trump’s first year in office.

President Trump has shown a keen awareness of the market’s movements, often referencing its performance as a measure of his administration’s success. When recent volatility arose due to concerns over Greenland and tariffs, Trump dismissed the downturn as minor and predicted a rapid rebound. His decision to ease tariff threats later that day helped spark a market rally.

After dipping toward bear market territory in early April, the S&P 500 recovered and maintained an upward trend for the remainder of the year.

Several factors contributed to the positive performance of U.S. stocks in 2025, including optimism about artificial intelligence, expectations of Federal Reserve rate cuts, resilient corporate earnings, and a robust economy. Additionally, Trump signed the “One Big Beautiful Bill Act” into law over the summer, a move that could further stimulate the markets in the coming year.

Matt Maley, chief market strategist at Miller Tabak + Co, noted that the early impact of this stimulus played a significant role in the market’s strong showing during the first year of Trump’s second term. He added that many investors believe the administration aims to keep the economy running hot through the midterm elections, though this does not guarantee another bullish year for stocks. Still, there is little doubt that the White House is eager to see continued market strength, especially in the months leading up to the midterms.

Strong Returns Amid Market Turbulence

Trump’s second term began with notable gains and significant volatility. The VIX, Wall Street’s volatility index, soared to levels not seen since the pandemic during the spring’s trade policy uncertainty.

“The most remarkable event was the VIX surpassing 50 for the first time since the pandemic, driven by uncertainty over trade policy,” said Nick Colas, co-founder of DataTrek Research.

Tim Thomas, chief investment officer at Badgley Phelps Wealth Management, mentioned that he adjusted client portfolios to be more defensive, reducing exposure to riskier assets. However, he emphasized the importance of focusing on long-term fundamentals such as strong earnings, the AI boom, and supportive fiscal policies, rather than short-term market swings.

“Last year’s market performance was quite strong,” Thomas observed. “Policy uncertainty makes investing challenging, as it can shift rapidly and unexpectedly.”

He advised, “It’s wise to maintain some form of hedge, but above all, keep your attention on long-term goals and the underlying fundamentals of companies, as these will ultimately drive returns.”

Staying the Course: The Importance of Discipline

Following three years of impressive gains, many on Wall Street anticipate that the S&P 500 will continue its ascent this year, though uncertainty remains high. The U.S. dollar has struggled, while traditional safe havens like gold and silver have reached new highs.

Jim Hagerty, CEO of Bartlett Wealth Management, stressed the importance of maintaining discipline in investing. “When markets are performing exceptionally well or become turbulent, it’s easy to stray from your investment strategy,” Hagerty said. “My advice is to stay disciplined. Given the recent strength, review your asset allocation to ensure it fits your needs, and rebalance if necessary.”