Trump 2.0 stock market performance lags behind predecessors

President Trump has long treated the stock market like a personal report card. By that measure, his second term is pulling a B-minus where his first term earned an A.

The S&P 500 gained roughly 13% to 16% during the first year of Trump’s second presidency, from January 20, 2025, to January 20, 2026. That sounds perfectly respectable until you compare it to the 24.1% surge the index posted during the same window of his first term in 2017. It’s the weakest first-year performance for any new presidential term since George W. Bush’s second kick at the can in 2005.

Fewer records, more volatility

The index notched 39 record highs during Trump’s second-term first year. In 2017, it set 62. That’s nearly 40% fewer champagne-popping moments for bulls, despite the market technically moving in the right direction.

Context matters here. Trump’s second term began after two consecutive years of 20%-plus annual S&P 500 gains. Starting from an already elevated base makes big percentage jumps harder to achieve.

According to data from Fundstrat, both the best and worst single-day market moves during the period were closely tied to Trump administration policies. April 2025 tariff adjustments, in particular, generated substantial one-day swings in both directions.

A summer 2025 stimulus bill offered a brief tailwind. It was enough to support sentiment temporarily, but not enough to close the gap with the first-term trajectory.

Global markets have been eating America’s lunch

Perhaps the most uncomfortable data point for the administration: global equities outside the US outpaced the S&P 500 during Trump’s second-term first year, according to MSCI data. That’s a notable reversal from the “American exceptionalism” trade that dominated markets for much of the prior decade.

Trump has publicly stated his expectation that the Dow Jones Industrial Average will reach 100,000 by the end of his term. The Dow would need to roughly double from its early-2025 levels to hit that target.

Why this matters beyond stock tickers

Trump considers the stock market a proxy for the economy, even though many economists disagree with that framing. GDP growth, employment figures, and wage data paint a more complete picture of economic health than index levels do.

The gap between first-term and second-term stock performance creates a political problem. Voters who remember the 2017 rally may feel underwhelmed by the current trajectory, even though a double-digit annual gain would be considered strong in most historical contexts.

Some strategists have pointed to sectors like defense and banking as potential beneficiaries of the current policy environment. These industries have historically shown resilience during periods of geopolitical tension and trade uncertainty.

The broader concern is that Trump’s 100,000 Dow target could cultivate speculative behavior among retail investors who take presidential projections at face value.

As of mid-2026, the market has continued to show gains but with a volatility profile that keeps risk managers busy. The question heading into the back half of Trump’s term isn’t whether stocks will go up. It’s whether the policy-driven whiplash that defined the first year becomes the permanent texture of this market, or whether a more stable equilibrium eventually takes hold.

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