Last year saw the stock market grow but still marked the worst first year of a presidential administration in terms of stocks since 2005, as President Trump’s drastic shifts on tariffs fueled economic uncertainty.
From his inauguration day last year through Jan. 20 of this year, the S&P 500 rose 13.3% – the most tepid start to a presidency in 20 years, since George W. Bush entered his second term, CNN reported.
By comparison, during the first year of Trump’s first term in the Oval Office, the S&P 500 skyrocketed 24.1%, according to CFRA Research cited by CNN.
Last year, the S&P 500 notched 39 record highs. Back in 2017, when Trump first took office, it reached 62 all-time highs.
International stocks outperformed the US market for the first time in years as the president’s abrupt tariff announcements stoked volatility in the markets, CNN noted.
“If [this past year] is the weakest year, we will take a ‘weak’ year every year,” Mahoney Asset Management CEO Ken Mahoney told The Post. “Starting the new year, however, there are multiple balls in the air and we are failing to make new highs or higher highs.”
New tariffs, geopolitical tensions and a metals rally as investors flock to safe-haven assets are “a bit concerning,” he added.
The first year of Trump’s second term followed the S&P 500’s first back-to-back annual gains of more than 20% since the 1990s – so the bar was already high for further market gains in 2025, CNN reported.
Still, stock market gains are widely viewed as a bright point in the current Trump economy – largely driven by AI optimism, interest rate cuts, strong corporate earnings and a fairly resilient economy.
“Joe Biden inherited three lifesaving COVID-19 vaccines and an economy that was artificially depressed by Democrat state officials implementing draconian pandemic shutdowns. President Trump, on the other hand, inherited the worst inflation crisis, immigration disaster, and cumbersome regulatory regime in a decade,” White House spokesman Kush Desai told The Post.
“The S&P 500 and other market indexes hitting multiple all-time highs and mortgage rates dropping to a multi-year low are both indicative of the dramatic transformation that President Trump continues to deliver for the American people.”
Analysts have largely blamed market volatility on the Trump administration’s back-and-forth on foreign trade policy.
In April, stocks plummeted near a bear-market level after he unveiled a sweeping batch of “Liberation Day” tariffs. The White House is currently awaiting a Supreme Court decision on whether Trump overstepped his authority to impose those levies, though officials say they have back-up plans ready to keep the tariffs in place if the highest court in the land rules against them.
After the president paused many of those tariff threats, stocks rebounded sharply – a recurrent pattern throughout the rest of the year.
Last week, Trump said a stock market dip over tensions with Greenland and fresh tariff threats on European allies were “peanuts,” adding that markets would soon be “doubled.”
When he backed off threats to slap additional tariffs on several European nations opposed to his bid to take over the gigantic island, markets bounced back.
The Greenland standoff sent the VIX – Wall Street’s 30-day volatility forecast, also known as the “fear gauge” – to new highs, surging over 50 for the first time since the pandemic.
As the US dollar has been flailing, investors have flocked to safe-haven assets like gold and silver – pushing gold above $5,000 for the first time.
Still, 2025 marks the third consecutive year of strong stock market gains, and Wall Street is expecting the S&P 500 to continue its rise throughout 2026.
“We can make volatility either a friend or a foe,” Mahoney said in a recent note.
“This year has already been quite volatile, so it’s important to sell into strength but to do it incrementally as it’s not about trying to time the market perfectly. Investors should be prepared to buy during the downturns especially around the election period.”
