15 MAY 2025
The chart below shows the performance of the S&P 500 index in the aftermath of President Trump’s two election wins.
To make for an easier comparison, both starting points are rebased to 100.
The blue line shows an approximate 60% capital gain for the US stock market in the 4 years following Trump’s November ’16 victory. Given the prevailing market volatility, note the multiple wild swings investors had to tolerate to secure that solid overall return.
Trump regularly aligned his Presidency to booming equity prices during his first term, but seems to have adopted a different playbook this time around.
But has he?
Per the red line, the S&P 500 has already shed 10% since last November’s election result (and is down almost 20% peak-to-trough this year), but such drawdowns are no different to the sell-offs we saw in 2016-2020.
Zooming out, it is hard to see the President tolerating a weak stock market for the duration of his second term.
In fact, the odds strongly favour him doing whatever it takes to boost the economy (and stock prices) well before next year’s mid-term elections.
The content of this communication is for information purposes only. Bentley Reid believes that, at the time of publication, the views expressed and opinions given are correct but cannot guarantee replication of depicted performance. Viewers intending to take action based upon the content of this communication should first consult with the professional who advises them on their financial affairs. Capital invested will be at risk, and you may get back less than you invest. The past is not a reliable indicator of future performance. Neither the publisher nor any of its subsidiaries or connected parties accepts responsibility for any direct or indirect loss suffered by a recipient as a result of any action or inaction, in reliance upon the content of this communication.
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