Donald Trump’s first year back in the White House would be one for the record books. It marked the lowest stock market performance for any president’s first year of a new term since George W. Bush in 2005. As recently as early April, the S&P 500 index was on the verge of bear market territory. Yet after that it made a big recovery as 2021 went along. This wild swing up and down is a testimony to a complex playing field influenced by domestic economic factors and global forces at work.
In 2025, international stocks outperformed their U.S. counterparts for the first time in years, highlighting a shift in investor sentiment. Even as uncertainty over tariffs first rocked the market, it soon settled down as Trump tempered his worst and loudest bluster. That’s why the first bill signed into law this summer was the “One Big Beautiful Bill Act.” Though this change improved market conditions, it fell short of providing any concrete boost to the confidence in the local bourse.
Market Performance Overview
The continued volatility characterizing the S&P 500, especially its catastrophic nosedive in early April, brought many investors dangerously close to a bear market. Much of this downturn can be explained by the tariff related policy uncertainty that sparked investor anxiety. As Trump began to soften his trade-related firebrand act, the market roared back to life. In fact, it kept sailing further upward for the balance of 2022.
Tim Thomas, a financial analyst, commented on the recovery, stating, “The market performance last year was pretty good.” Nonetheless, he cautioned that “there is a lot of policy uncertainty out there,” which can complicate investment decisions. He stressed that investors need to have a hedge in place when the times are volatile.
As staggering as all this may sound, the underlying optimism among investors was palpable. Analysts on Wall Street are almost universally forecasting another year of big gains for the S&P 500. They are counting on enthusiasm for artificial intelligence (AI), robust corporate earnings, and a surprisingly resilient economy to fuel this growth.
International vs. Domestic Stocks
It was the first time in many years that international stocks outperformed U.S. stocks. Among the myriad of factors, due to global economic pressures and changing investor priorities, this shift is being driven by a global market transformation. Though U.S. markets were reeling, other countries took advantage of aggressive markets and opened huge avenues that gained them market share.
The ongoing strength of the U.S. dollar in 2023 made it even worse on the domestic investor front. With international markets catching fire, investors flocked to safety. Consequently, safe havens such as gold and silver soared to all-time highs.
Jim Hagerty, previous scorecard classmate and financial wizard, reminded us all about how hard it is to keep your discipline when the markets go haywire. “When markets have been really good, or occasionally when they’re scary, it can tempt people away from their disciplines,” he remarked. He implored investors to help them ignore the noise and remain focused on long-term fundamentals, claiming that these are all that matter in return creation.
Looking Ahead
Even as Donald Trump’s second term ironically looks to be as different from his first, that’s exactly what’s starting to happen. That first year was full of great progress tempered by periods of volatility. With the S&P 500 soaring +29.6% in 2021 and another +26.9% in 2022—its first consecutive annual gains of more than +20% in over 30 years. In Trump’s first term, it was the fastest growing federal account, increasing 24.1%.
While Trump views the stock market as a barometer of his administration’s success, analysts caution against letting short-term fluctuations dictate investment strategies. “You need to have some kind of hedge in place,” Thomas reiterated, emphasizing the importance of a balanced approach to asset allocation.
Trump’s optimistic outlook remains intact despite recent market dips influenced by tariff discussions and geopolitical tensions over regions like Greenland. He characterized these drops as just “peanuts,” because he was sure that the market was on the brink of another big boom.