We don’t have to look any further than our investment statements to know that Donald Trump’s first 100 days were tough on the stock market. While a rocky first 100 days may be an indicator of lower returns, history shows that it doesn’t necessarily mean negative returns over the next four years.
Let’s look back to 1949:(1)
- When markets were down in the first 100 days, the average four-year return was 20.6%.
- When markets were up in the first 100 days, the average four-year gain was 53%
In short, market returns were lower when stocks were down in the first 100 days than when stocks were up in the first few months.
But what about this time?
We are getting mixed signals.
The S&P 500 was down 7.8% in Trump’s first 100 days. The last time the stock market performed this poorly was under Nixon in 1973 when the S&P 500 tumbled 9.9% in his first 100 days. Yet Trump’s first term delivered strong gains at 68%, despite the COVID-19 bear market in 2020.(1)
I think it’s fair to say we don’t know what to expect.
Wall Street is nervous about potential tariffs and rising inflation; earnings estimates are down. (2) It remains to be seen how much Trump will stay committed to his tariffs policies, or how other changes may affect the markets.
The US has experienced a lot of challenges over time. Challenges are not new.
With a long-term perspective and a steady approach, there’s good reason to believe the markets will deliver growth over time. They always have.
Stay the course,
Barbara
4 May 2025
https://www.barrons.com/articles/trump-first-100-days-stock-market-0043abbe
https://www.wsj.com/economy/us-gdp-q1-2025-1f82f689
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