Trump's First Presidency Saw Strong S&P 500 Gains: What About This Term?

Trump's first presidency spanned from January 20, 2017, to January 20, 2021. Between Election Day on November 8, 2016, and his inauguration on January 20, 2017, $S&P 500 Index (.SPX.US)$ rose by 6.56%. Six months after his inauguration, the S&P 500 had gained 9.27%; one year in, it had increased by 24.15%. By the end of his term, the S&P 500 had accumulated a growth of 67.82% over the four years. Judging by the S&P 500's performance during Trump's first term, it seems that his tenure and policies were more favorable to the stock market.

Trump's last term saw a strong performance from the S&P 500; how about this term? As of December 20th, The S&P 500 has experienced its highest increase of over 6% since Election Day, maintaining a strong upward trend. On December 18th, U.S. time, the Federal Reserve announced a rate cut of 25 basis points to a range of 4.25% to 4.50%. Despite expectations for the meeting, the hawkish stance taken had a profound effect on U.S. equities. $Dow Jones Industrial Average (.DJI.US)$experienced a sharp decline of 1,100 points, the first instance of ten straight days of losses since 1974. The S&P 500 fell by 2.95%, and $CBOE Volatility S&P 500 Index (.VIX.US)$, known as the market's 'fear gauge,' jumped a staggering 74%.

Trump's policies aimed at stimulating economic growth, reducing taxes, and deregulating the banking sector are expected to benefit the financial sector. Wells Fargo bank analyst Mike Mayo believes that a new era of deregulation could enhance the profitability of Wall Street banks. $Citigroup (C.US)$, $Goldman Sachs (GS.US)$, and $JPMorgan (JPM.US)$ surged following Trump's victory.

Market analysis suggests that Trump's tax cuts are generally positive for the U.S. stock market, with small-cap stocks seeing significant benefits. Analyst Ruben Naqvi anticipates a decline in capital concentration, with funds shifting from tech giants to smaller and cyclical stocks. Post-Trump's election win, $Russell 2000 Index (.RUT.US)$ reached an all-time high with a gain of over 10%. Smaller companies are more likely to benefit from the tax cuts advocated by Trump.

Following Trump's inauguration, there will also be an impact on Trump-related stocks. After Trump's election win, $Bitcoin (BTC.CC)$ prices surpassed $100,000, $Tesla (TSLA.US)$ shares hit new highs, and $Trump Media & Technology (DJT.US)$ stocks soared, triggering trading halts, with Trump-related stocks experiencing significant gains.