Trump Presidency & Stock Market: 85 Years of Precedent

**Implied Volatility / Movement:**

Historical analysis of presidential terms and market performance indicates a tendency for stock indexes to advance, even amid significant geopolitical events. Over the past 85 years, the Dow Jones Industrial Average, S&P 500, and Nasdaq Composite have shown notable gains during terms marked by global shocks.

During President Donald Trump's first term, the Dow Jones Industrial Average, S&P 500, and Nasdaq Composite rallied 57%, 70%, and 142%, respectively. Since his second-term inauguration, these indexes have additionally gained 23%, 28%, and 32%, respectively. This performance outpaces many historical presidencies.

However, these gains have not been without volatility. Significant events such as the COVID-19 crash, where the S&P 500 shed 34% in 33 days, and the "tariff tantrum" which saw the S&P 500 lose over 10% in two trading sessions, highlight periods of sharp decline. Despite these volatile episodes, data compiled from over three dozen stock market shock events since 1940 suggests that the S&P 500 has historically gained a median of 3% one year after a shock event began, with positive returns occurring in 65% of such instances. This historical precedent suggests that an imminent market crash is not a foregone conclusion, although periods of elevated volatility remain a recurring theme.