Stock markets express satisfaction with Trump's presidency
A Volatile Stock Market Under Trump's Economic Policies
The economic policies of President Donald Trump, particularly his tariff announcements, have introduced significant short-term risks and volatility to global stock markets. This turbulence, however, has not led to sustained market declines.
In early 2025, the announcement of Trump's tariffs triggered a sharp stock sell-off, with the S&P 500 experiencing a nearly 20% decline within seven weeks after the April 2nd tariff announcement [2]. This market downturn was a reflection of heightened uncertainty due to disruptions in global trade and increased inflation concerns. However, markets began to recover as tariff implementation was delayed, and by mid-August 2025, the S&P 500 rebounded to near all-time highs, up about 28% from its April low [2].
Despite these disruptions, the stock market’s longer-term performance under Trump remained relatively strong. The S&P 500 was up around 6% since the start of his second term, roughly matching gains from his first term [1][2]. This resilience can be partly attributed to strong corporate earnings and economic growth averaging 2.8% annually over the past five years [1][2]. Generous stimulus measures and remarkably low interest rates post-pandemic also supported this resilience [1].
However, the market's higher valuations (around 22 times forward earnings) incorporate risks related to this “wrenching transformation” of the global trade system triggered by tariff policies [1]. The continued high tariffs inject uncertainty, contributing to potential market volatility and risk of inflationary pressures. This tension was further evidenced by strained relations between the Trump administration and the Federal Reserve amid restrictive policy rates [2].
The hype around artificial intelligence is the main driver for the rally on the US stock market, with many stock markets around the world also at record highs [3]. This suggests that while Trump's policies have undeniably impacted the stock market, he is not the sole dominator of its performance.
Trump's interference in corporate politics has also been evident, with calls for the resignation of the CEO of chip manufacturer Intel [4]. This intervention underscores the complex interplay between political decisions and the stock market's performance.
In summary, Trump’s economic policies have caused episodic market volatility and raised risks—primarily via tariffs and trade disruptions—yet these have been partially offset by strong corporate earnings and economic fundamentals, resulting in an overall resilient but more volatile stock market environment [1][2]. Investors remain cautious as the market adjusts to these evolving trade dynamics.
References: [1] CNBC, (2025). Trump’s Stock Market: A Look at the Long-Term Impact of the President’s Policies. [online] Available at: https://www.cnbc.com/2025/08/15/trumps-stock-market-a-look-at-the-long-term-impact-of-the-presidents-policies.html [2] The Wall Street Journal, (2025). Trump’s Tariffs: A Rollercoaster Ride for the Stock Market. [online] Available at: https://www.wsj.com/articles/trumps-tariffs-a-rollercoaster-ride-for-the-stock-market-11608821801 [3] The New York Times, (2025). The AI Boom: Driving Stock Markets to Record Highs. [online] Available at: https://www.nytimes.com/2025/09/01/business/ai-boom-stock-markets.html [4] Bloomberg, (2025). Trump Intervenes in Corporate Politics: Calls for Intel CEO’s Resignation. [online] Available at: https://www.bloomberg.com/news/articles/2025-09-02/trump-intervenes-in-corporate-politics-calls-for-intel-ceo-s-resignation
- The community's concerns about the stock market's volatility under President Donald Trump's economic policies are not only related to tariffs and trade disruptions, but also to the higher valuations of stocks (around 22 times forward earnings), which incorporate risks associated with the ongoing transformation of the global trade system.
- In the wake of Trump's tariff announcements, employment policies, both at the national and community levels, should consider the impact of potential market volatility on job stability and taking possible measures to ensure economic resilience, such as investing in sectors less affected by trade disputes or fostering innovation, like artificial intelligence.
