The U.S. stock market has shown mixed trends under different presidents. From post-war booms to trade war shocks, each presidency has seen unique market reactions. Now, the market is once again in focus as Donald Trump enters his second term.
The S&P 500, which tracks the 500 largest U.S. companies, had a rocky start during Trump’s second term. In fact, it recorded the third-worst 100-day start in modern U.S. history. Only Gerald Ford and Richard Nixon had weaker openings.
This article looks at how the market has responded to Trump, Biden, and earlier leaders, and what that might mean for investors in 2025.
Trump’s Second Term: A Volatile Start
After Trump won re-election in November, markets initially surged. Wall Street hoped for another round of business-friendly policies. But those hopes were soon tested.
Trump introduced new tariffs and shifted trade policies several times. This caused major uncertainty. As a result, the S&P 500 dropped sharply and closed its first 100 days with a significant loss.
According to CFRA Research, this ranks among the worst early performances for any U.S. president since World War II. Sam Stovall, the firm’s chief strategist, noted that historical data suggests early market trends can affect the rest of the year.
“If the market rises in the first 100 days, the full year often ends strong,” said Stovall. “If it falls early, the rest of the year tends to struggle.”
Biden’s First Term: Recovery and Challenges
When Joe Biden took office in January 2021, the market was already recovering from the COVID-19 crash. Biden focused on stimulus spending, vaccine rollouts, and rebuilding global partnerships.
The S&P 500 responded well, posting gains during his first 100 days. By the end of 2021, markets had reached record highs.
However, 2022 brought challenges. Inflation spiked. The Federal Reserve raised interest rates. And Russia’s war in Ukraine created global instability. By the end of Biden’s third year, market growth had slowed.
Even so, his early-term market boost matched the historical pattern: a strong first 100 days often signals a good year overall.
How Other Presidents Performed
Looking at previous presidents gives helpful context:
- Barack Obama (2009–2017): Took office during the Great Recession. The S&P 500 surged after March 2009 and saw steady growth for years.
- George W. Bush (2001–2009): Faced early shocks like 9/11 and the dot-com crash. The 2008 financial crisis ended his term with heavy losses.
- Bill Clinton (1993–2001): Oversaw a tech-driven boom. Markets grew strongly throughout most of his presidency.
- Ronald Reagan (1981–1989): Took office during high inflation. After early struggles, markets climbed thanks to tax cuts and deregulation.
Since 1945, the S&P 500 has returned an average of 2.1% during a president’s first 100 days. If the index rises more than this, the full year typically gains about 21.1%. If it rises less, the year may close with a 5.5% loss.
Why It Matters to Everyday Investors
Many Americans are connected to the stock market, even if they don’t trade daily. A 2024 Gallup poll showed that 62% of U.S. adults hold stocks. This includes retirement accounts like 401(k)s and IRAs that track the S&P 500.
This means presidential policies, especially on trade, taxes, and spending, can affect long-term savings for millions.
What’s Next in 2025?
Trump’s second term could bring more surprises. His trade policies are still unclear. Investors are watching for updates on tariffs, tax plans, and global tensions.
Sam Stovall from CFRA warns against panic. “History is a guide, but it’s never gospel,” he said.
While markets often respond quickly to political news, long-term trends depend on many factors: global growth, inflation, interest rates, and innovation.
Expert Insight: Trade Tensions Could Shape Markets
One of the key issues in 2025 is trade. Trump’s focus on tariffs has already shaken global markets. Businesses are unsure how supply chains will be affected.
“I think a lot of people on Wall Street were expecting tariffs to be more rhetoric than reality,” said Stovall. “In fact, it ended up being reality.”
With talks of tariffs on Chinese tech goods and possible retaliation from trade partners, market volatility may continue. Investors should stay informed and review their portfolios with care.
