Major Stock Market Performance Since Trump Took Office: 7-Month Outlook

The stock market’s performance since Donald Trump began his second term has been anything but smooth — and that’s exactly why traders need to pay attention. Early volatility shook out the weak hands, but recent record highs show what happens when the market adapts to new policies. Understanding this environment helps you stay prepared, adjust risk, and look for price action that matches your trading plan.

Read this article because it breaks down how the stock market has performed in the first 7 months since Trump returned to office, with insights into tariffs, tax reforms, sector winners, and how it compares to his first term and Biden’s market trends.

I’ll answer the following questions:

• How has the stock market performed in the 7 months since Trump took office again?
• What impact have Trump’s tariff policies had on market performance?
• How do current economic trends compare to those during Trump’s first term?
• What effect did Trump’s tax reforms have on stock market growth?
• How have international stock indices responded since Trump’s second inauguration?
• How does market volatility under Trump’s second term compare to Biden’s tenure?
• Which sectors and ETFs have performed best during Trump’s second term?
• Did the technology sector lead the market during Trump’s return to office?

Let’s get to the content!

Impact of Trump’s Tariff Policy

Trump’s tariff policies have become a defining feature of his second term, and they’ve injected real instability into the markets. The “Liberation Day” tariffs announced on April 2 caused a rapid 10% drop in the S&P 500 over just two trading sessions, shaking confidence across sectors. These new trade barriers impacted a wide range of imported goods, raising concerns about inflation and future earnings. While some of the tariffs were later paused or modified, the uncertainty they introduced hasn’t gone away.

Cut to the chase — here’s my tariff watchlist! 

This tariff-driven volatility has directly impacted price levels and has forced companies to reevaluate supply chains. Walmart’s earnings call mentioned pricing pressures, and that’s a clear signal for traders watching how companies pass on costs to consumers. Tariffs can create a spike in inflation data and force the Federal Reserve to respond with interest rate policy shifts. This type of macro event is what I always tell students to look out for — it’s not just about chart setups. You need to understand the policy drivers behind the moves.

In my own trading, I’ve seen how these types of policy shocks can create fast opportunities — and just as quickly wipe out gains if you’re caught leaning the wrong way. Focus on volume and relative strength when tariffs hit the news cycle. When capital rotates, watch what sectors hold up best.

Major Economic Trends During Trump’s Second Term

The major economic trends so far under Trump’s second term reflect a tug-of-war between policy impact and market resilience. GDP showed 3% growth in Q2 2025, but the headline was boosted by a sharp drop in imports rather than rising domestic demand. Consumer spending has been solid, but housing starts are down and inflation is hovering around 2.9%, indicating sticky price pressures. Meanwhile, the labor market is starting to cool, with growth in jobs missing expectations and the unemployment rate ticking up to 4.3%.

What matters for traders is how these data points affect risk sentiment. We’ve seen persistent high interest rates, with the 10-year Treasury yield trading in a volatile range between 3.8% and 4.6%. That matters because it affects how capital flows into equities. Inflation, yields, and employment all influence which sectors attract attention — and where momentum dries up.

In my experience, economic shifts often show up in the charts before the headlines confirm them. When you understand how labor markets and inflation data tie into rate expectations, you can better anticipate sector moves and short-term sentiment shifts. 

To stay ahead of sector moves and shifting market sentiment, you need a trading platform that delivers real-time, actionable data you can trust.

 

When it comes to trading platforms, StocksToTrade is first on my list. It’s a powerful day and swing trading platform with real-time data, dynamic charting, and a top-tier news scanner. It has the trading indicators, dynamic charts, and stock screening capabilities that traders like me look for in a platform. It also has a selection of add-on alerts services, so you can stay ahead of the curve.

Grab your 14-day StocksToTrade trial today — it’s only $7!

How Did Trump’s Tax Reform Policies Impact the Stock Market?

Trump’s tax reform policies in 2025, including the extension of 2017 tax cuts through the One Big Beautiful Bill Act, had a clear bullish impact on the market. Corporate tax relief boosted earnings, especially for large-cap companies with high domestic revenues. That earnings growth helped fuel a rally after the early-year selloff, contributing to the S&P 500’s recovery and eventual breakout to new record highs.

The tax changes helped offset some of the pain from tariffs by increasing companies’ bottom lines. That’s why the market was able to rally even with rising inflation concerns. Capital came back into equities once traders saw stronger earnings reports and improved forward guidance.

In trading, I always say the reaction to the news matters more than the news itself. The positive price action following the tax extension showed that the market was willing to bet on better returns despite macro risks. Traders should track how earnings revisions move after policy changes — that’s often where the best setups form.

How Have the International Indices Reacted Since Trump’s Inauguration?

International stock markets have shown mixed performance since Trump’s second inauguration in January 2025. U.S. indices like the S&P 500 and Nasdaq hit record highs, but that strength hasn’t been matched overseas. The trade tensions, especially with China and Europe, have led to weaker performance in international indices, including the Euro Stoxx 50 and the Shanghai Composite.

Currency pressure also played a role. The U.S. dollar has fallen since mid-May, in part due to tariff impacts and speculation around Trump replacing the Fed chair. That shift boosted some foreign markets temporarily, but the lack of stable trade agreements has kept global markets on edge. For traders watching ADRs or ETFs tied to foreign markets, this has created unpredictable gaps and price swings.

From a trader’s perspective, these kinds of international reactions can offer opportunity if you know where to look. Watch how global ETF flows react to tariff headlines. I always remind traders to use tools like currency-hedged ETFs when the dollar is moving. You can’t trade in isolation — global reactions can affect U.S.-listed stocks and sectors fast.

Trump’s First 7 Months of 1st Term vs. 2nd Term

Trump’s first seven months in office in 2017 saw smooth gains with strong economic momentum, but his second term in 2025 started much more rocky. In the first term, the S&P 500 climbed steadily as corporate optimism and tax reform hopes drove capital into the market. Compare that to 2025, where the S&P 500 dropped over 7% in the first 100 days and took months to recover.

The difference is all about volatility and expectations. The 2025 market has had to contend with sticky inflation, a weakening labor market, and disruptive tariff policies. While both periods eventually led to gains, the path in Trump’s second term has been far more uneven. That kind of environment tests discipline and execution.

When I teach traders, I stress how market context matters. You can’t treat every bull market the same. In 2017, you could swing trade strength with more confidence. In 2025, I tell my students to tighten risk, shorten holding periods, and focus on liquidity. Don’t trade the memory of the last market — trade the one in front of you.

Stock Market Volatility Under Trump Compared to Biden’s Presidential Tenure

Market volatility under Trump’s current presidency has been notably higher than during Biden’s term. The VIX spiked sharply after the April 2025 tariffs and has remained elevated relative to 2021–2024 averages. Biden’s market was more stable, partly due to more predictable policy decisions and a less aggressive trade stance.

Under Trump, news-driven price action is common. One tariff headline can move $7 trillion in market value in a matter of days, like what we saw after “Liberation Day.” That kind of volatility creates opportunity for experienced traders, but it also increases the risk for those without a plan. Biden’s slower-moving market may have frustrated fast traders, but it offered more reliable trends.

Volatility is one of the most misunderstood market forces. As a trader, I don’t avoid it — I prepare for it. That’s why I teach students to track implied volatility, manage size, and focus on stocks that hold relative strength when the indexes shake out. You can’t control market conditions, but you can control your reactions.

Key Takeaways

• The stock market under Trump’s second term has seen sharp ups and downs, driven by policy changes, especially tariffs.
• Inflation and interest rates remain high, affecting consumer behavior, corporate margins, and sector performance.
• Corporate earnings have shown strength due to new tax legislation, helping fuel a market rebound after the early-year decline.
• Traders need to stay nimble and adapt to higher volatility and rapid sentiment shifts.

This is a market tailor-made for traders who are prepared. Political policies can create volatility, but it’s up to you to capitalize. Stick to your plan, manage your risk, and don’t let FOMO drive your decisions.

These opportunities are fast and unpredictable, but with the right strategy, you can make them work for you.

If you want to know what I’m looking for — check out my free webinar here!

Frequently Asked Questions

Were There Significant Losses or Declines During Trump’s Second Term?

Yes, the market experienced sharp losses during the early part of Trump’s second term, especially following the April 2 tariff announcement. The S&P 500 dropped more than 10% over two sessions, briefly pushing the market into a near bear territory. Traders had to manage sudden declines across sectors, with many small-cap stocks seeing outsized damage.

How Did the Rate Environment Impact the Market’s Recovery From the Downturn?

The Federal Reserve maintained a relatively high interest rate stance through most of 2025, which limited how fast the market could recover from the early-year downturn. Although longer-term yields began to fall by midyear, the high-rate environment kept pressure on growth stocks. Traders looking for upside had to factor in how tightening policy affects both borrowing costs and equity valuations.

Which Prices Were Most Affected by Tariff and Policy Shocks?

Prices for both imported consumer products and industrial goods rose due to the new tariff regime. Companies passed those costs to consumers through higher sticker prices, contributing to the 2.9% inflation reading in August. This has increased volatility for traders in inflation-sensitive names like retail, autos, and manufacturing.

How Have Different Industries and Services Responded to the Trump Administration’s Policies?

Industries like defense and nuclear energy have benefited from favorable policies, while sectors dependent on imports, including retail and manufacturing, have struggled. Services tied to consumer spending have faced pricing pressures due to rising costs and weakening demand. Traders should study how administration policies create winners and losers across various business segments.

How Does Trump’s Market Compare to Joe Biden’s in Terms of Money and Portfolio Strategy?

Compared to Joe Biden’s presidency, Trump’s second term has required more active money management and shorter portfolio timeframes due to frequent market-moving events. Biden’s market offered slower, steadier trends, while Trump’s has been marked by sudden shifts tied to political and trade-related headlines. Traders must stay nimble and ready to adjust positions based on government actions and fiscal policies.

Did Trade Policy Events With Canada and the United States Trigger Volatility?

Yes, tariff announcements involving Canada and other trading partners created spikes in market volatility, especially in industries tied to cross-border products like energy and agriculture. These trade events have disrupted supply chains and increased costs, affecting both companies and consumers. The uncertainty around bilateral trade agreements continues to be a risk factor.

What Should Traders Take From This Article’s Analysis?

This article provides a trading-focused analysis of how policy events and economic shifts have impacted price action during Trump’s second term. Understanding the connection between tariffs, rate policy, and corporate performance gives traders an edge in volatile conditions. Use this as a framework to plan trades around upcoming political and macroeconomic events.

Why Do Political Events Matter More for Traders Than Investors?

For traders, events tied to government decisions can lead to fast and violent price moves that don’t always reflect long-term fundamentals. That’s why I teach students to treat administration actions as catalysts, not just headlines. Unlike long-term investments, trades rely on timing, momentum, and how the market reacts, not just the event itself.