US Stock Market Records Worst First-Year Performance in 20 Years Under Trump’s Leadership
- How Did the US Stock Market Perform in Trump’s First Year Back?
- What Triggered Historic Volatility Spikes?
- Why Did Fear Levels Reach Pandemic Highs?
- What Drove Market Growth Despite the Turbulence?
- What’s the Outlook for 2026?
- Frequently Asked Questions
The US stock market delivered positive returns during Donald Trump’s first year back in office, but gains fell short compared to other recent presidential terms, marking the slowest start for any administration in two decades. Market indices ROSE 13.3% between Inauguration Day and January 20, 2026, according to CFRA Research data reviewed by CNN. While these returns seem solid on their own, they represent the smallest first-year increase since George W. Bush began his second term in 2005. The performance also lagged behind Trump’s own previous record during his first term, when markets surged 24.1% in the first twelve months.
How Did the US Stock Market Perform in Trump’s First Year Back?
Investors drove stocks higher throughout the year, continuing a rally fueled largely by enthusiasm around artificial intelligence technology. Meanwhile, foreign markets outperformed US equities in 2025—a shift not seen in several years. However, the market didn’t start from scratch. TRUMP took office after two consecutive years where the S&P 500 gained over 20% annually, a streak unseen since the 1990s. This meant expectations were already high when his second term began.
What Triggered Historic Volatility Spikes?
The past year was marked by significant uncertainty, with the administration repeatedly shifting direction on key policies. Markets nearly entered bear territory in April when confusion around tariff plans spooked investors. Prices rebounded sharply after Trump walked back some of his more severe proposed measures. Overall, the S&P 500 hit 39 all-time highs during the year—compared to 62 record peaks in 2017 during Trump’s first year.
Why Did Fear Levels Reach Pandemic Highs?
The VIX, which measures Wall Street’s anxiety, soared to levels not seen since the pandemic when tariff confusion peaked in spring. "The only truly exceptional thing was the VIX crossing 50 for the first time since COVID," explained Nick Colas of DataTrek Research. Some wealth managers, like Tim Thomas of Badgley Phelps, shifted client portfolios toward defensive assets but remained focused on fundamentals like AI-driven earnings growth.
What Drove Market Growth Despite the Turbulence?
Several factors contributed to 2025’s market growth: AI sector enthusiasm, Optimism about potential Fed rate cuts, better-than-expected economic performance, and Trump’s summer signing of the "One Big Beautiful Bill Act." Market strategist Matt Maley noted this legislation’s anticipated stimulus likely boosted first-year returns.
What’s the Outlook for 2026?
After three strong years, Wall Street generally expects the S&P 500 to keep climbing—though doubts persist. The dollar has struggled recently while SAFE havens like gold hit new records. Bartlett Wealth Management’s Jim Hagerty emphasized investor discipline: "When markets are roaring or scary, people stray from their strategies. I’d just stress: stick to your plan."
Frequently Asked Questions
How does Trump’s current market performance compare to his first term?
The S&P 500 gained 13.3% in his first year back versus 24.1% during his initial presidency.
What was the most volatile period in 2025?
April saw near-bear market conditions amid tariff plan confusion, with the VIX spiking above 50.
Which sectors outperformed in 2025?
AI-related stocks and foreign markets notably outpaced broader US equities.
