President Donald Trump is considered the ultimate president for the stock market, overseeing numerous expansions to all-time highs while also acting as a catalyst for major declines.
Within the first two months of President Trump’s second term, S&P500 It experienced the most rapid decline into corrective territory since World War II, primarily due to uncertainty surrounding tariff policy. Less than a month later, the index nearly ended in bear market territory following the president’s “Emancipation Day” tariff announcement. A correction is defined as a decline of at least 10% but less than 20% from a recent high, and a bear market is defined as a decline of at least 20% based on closing prices.
But the market recovered faster than usual under the Trump administration.
When it comes to declines between 5% and 9.9% from the S&P 500’s peak, the two declines that have occurred since the beginning of 2025 reversed faster than the median 34 days, according to CFRA Research. This is a higher recovery rate than under any other president since Ronald Reagan in 1981.
“Bull markets take stairs, bear markets take elevators,” said Sam Stovall, chief investment strategist at CFRA Research. “What we’re seeing in Trump 2.0 is lower overall volatility and faster-than-average recoveries from sharp declines.”
The most recent recovery during the Trump administration’s second term, when the S&P 500 recovered from a 9.1% decline in just 16 calendar days, was one of the fastest since World War II and tied for ninth place, CFRA said.
“Revenue growth is what’s making investors very optimistic,” Stovall said.
new era
S&P 500 index profits rose more than 20% in the first quarter from a year earlier, according to FactSet data. This is close to the strongest profit expansion since the fourth quarter of 2021.
This solid earnings background, which underpins the public’s strong enthusiasm for artificial intelligence, may have supported the market’s recent recovery. However, the increase was prompted by expectations that the war between the United States and Iran would soon end.
Iran and the United States agreed to a ceasefire last month, easing concerns that oil prices would remain high and put upward pressure on prices. But the ceasefire has become increasingly fragile, with President Trump saying this week that it was being held “on life support.”
“News beats charts,” said Ryan Detrick, chief market strategist at Carson Group. “We’re in a very headline-driven world, a headline-driven market. Investors have had to strap in, ride the roller coaster, and go along with it.”
Detrick argues that the global stock bull market still exists and may still have a young lifespan. From here, he thinks it would be best for investors to buy on the dip.
“I don’t think there’s ever been a market that pays more attention to the daily news coming out of the White House,” he said. “I think we’re going to have to get used to this instability under President Trump.”
This speaks to a generational shift taking place on Wall Street. In recent years, investors, especially those who came of age in the wake of the global financial crisis, have been conditioned to use large market declines as buying opportunities.
“FOMO is very real for institutional investors,” said Steve Sosnick, chief strategist at Interactive Brokers.
Sosnick found that companies that sold in response to President Trump’s tariff announcements last year and delayed stock buybacks underperformed those that did not. That has now led to a “broadly speaking reluctance on the part of financial institutions to sell too aggressively,” he said.
“We may be putting off a little too much, or trusting a little too much, to get some good news from the administration,” the strategist told CNBC.
“Don’t fight with the White House.”
Investors’ obsession with announcements from the White House has been the market’s best and worst driver in the five days since Trump returned to office, according to FundStrat data.
The S&P 500’s best day since Trump became president again was April 9, 2025, when the S&P 500 soared more than 9% after Trump suspended broad tariffs. The worst day for the benchmark occurred on April 4, 2025, after China retaliated with its own taxes on U.S. goods.
Fundstrat says it’s the first time in nearly half a century that a U.S. president was responsible for so many of the best and worst market days in office. If not for five strong days in President Trump’s second term, the S&P 500 would have only risen 1% since taking office. This is in contrast to the index’s 23.5% rise since its inception.
“No other president has had more control over the wealth he has created in the stock market,” Hardika Singh, economic strategist at Fundstrat Global Advisors, said in an interview.
“The only strategy investors should follow is not to fight the White House, because you will lose and you will not make any money,” she said. “Throw away your old investment strategies.”
Matt Gertken, chief geopolitical strategist at BCA Research, said President Trump’s communication style, sometimes rapid-fire posts on social media, spurred market volatility and changed the way future presidents get their messages across to Wall Street.
“Social media is kind of the name of the game now,” Gertken said. “Even if you have a president who comes into office and tries to implement a very stable, routine way of communicating, the circumstances that he finds himself in may force him to adopt some of Mr. Trump’s standards later on.”
Regardless of whether a future president actually adopts Trump’s communication style, markets will continue to be volatile. If future presidents become more silent on social media, markets will be “confused and swayed by speculation,” according to Gertken. But if they speak as often as Trump does, the market will move based on their latest statements.
“There’s no going back now,” he said.
