President Donald Trump’s first 100 days in office have been tumultuous for the stock market, with the S&P 500 experiencing a 7.9% drop since he was sworn into office on January 20. This performance marks the second worst start to a president’s four-year term since the 1970s, with only President Richard Nixon seeing a larger decline of 9.9% in 1973 due to economic measures taken to combat inflation.
On average, the S&P 500 typically rises 2.1% in the first 100 days of a new president’s term, based on data from postelection years between 1944 and 2020. The severity of the stock market drawdown during Trump’s presidency contrasts sharply with the initial optimism that followed his election victory in November. The market surged to all-time highs in anticipation of tax cuts and deregulation under the new administration.
However, the rally quickly fizzled out as Trump began implementing other campaign promises, particularly in the realm of trade. His aggressive approach to trade has raised concerns among investors about inflation and the potential for a recession. In April, the S&P 500 took a nosedive, losing 10% in just two days and briefly entering bear market territory following Trump’s announcement of “reciprocal” tariffs.
While Trump later walked back some of these announcements, giving countries a 90-day window to renegotiate deals, investors remain wary of further downside. Jeffrey Hirsch, editor of the Stock Trader’s Almanac, expressed caution, stating, “I’m still thinking it’s a bear market rally, a near-term bounce kind of thing. I’m not convinced we’re out of the woods yet, with the lack of clarity and continuing uncertainty in Washington.”
As of now, the S&P 500 has erased all postelection gains from November, with the index closing at 5,525.21, down from a high of 6,144.15 on February 19. Trump has two more trading days to potentially improve his first 100-day performance, with his term officially ending on Tuesday. If the S&P 500 rallies this week, he may be able to mitigate some of the losses and avoid ranking among the worst starts, such as the 6.9% decline during the first 100 days of George W. Bush in 2001.
