Investors did not know what to expect from a Trump presidency. Would they get a traditional pro-business Republican who promised tax cuts, or an unpredictable populist who would disrupt trade? So far, they’ve gotten both in President Donald Trump, who sees the stock market as a barometer of his success. Stocks are up 25 per cent in the two years since his election, but it has not always been a smooth ride.
The Honeymoon Period
The chaotic first year of the Trump presidency featured policy missteps, administration firings, tensions with North Korea and the Russia investigation. But investors focused on the promise of tax cuts and deregulation, pushing markets up and up, and Trump spent much of 2017 crowing about the market’s gains.
Trump’s signature legislative achievement, the tax overhaul, was signed into law in December, setting the stage for a staggering rally in the first month of 2018.
Nov. 9, 2016
Stocks around the world tumbled overnight after Trump’s victory. But by the start of trading in the United States on Nov. 9, investors had begun to embrace the idea of a Republican-controlled White House and Congress.
Feb. 28, 2017
In his first speech before Congress, Trump called on politicians to back a repeal of the Affordable Care Act and an overhaul of the tax code. The next day, the S&P 500 posted its biggest daily gain since November.
May 17, 2017
News broke that the president had asked FBI Director James Comey to shut down a federal investigation into his former national security adviser, adding to doubts about Trump’s ability to accomplish his legislative agenda. Stocks had their worst single-day decline of 2017.
July 27, 2017
The Senate rejected a scaled-down Republican plan to repeal parts of the Affordable Care Act. After several failed efforts on Obamacare, the White House would turn its attention to tax overhaul as it searched for a win.
Aug. 10, 2017
Trump escalated his war of words with North Korea, declaring that a provocative threat to rain down “fire and fury“ might not have been harsh enough. Stocks suffered their steepest daily decline in months.
Nov. 2, 2017
Congress took up the tax overhaul. By the end of the year, the S&P 500 had risen 19.4 per cent and log its 14th straight month of gains, the longest such streak in history.
Dec. 22, 2017
Trump signed a $1.5 trillion tax cut into law. The windfall fueled a record volume of buybacks in 2018, lifting stock prices.
Things Get Rocky
Having gone up so much for so long, the stock market was increasingly at risk of a tumble in 2018. Valuations had climbed to the sort of levels that start to unnerve investors. And the new year brought some big new concerns. Investors started to worry about higher interest rates. And for the first time in decades, they had to contend with a president who publicly criticized the Federal Reserve.
Investors also spent most of 2018 trying to determine how big a threat Trump’s trade policies — especially toward China — were to stock prices and the economy.
Starting in October, worries about the economy, trade and the Fed’s continuing to raise interest rates became too much for investors. The selling began.
Then in the new year, the fear ebbed. The Fed signaled it might hold off on raising interest rates and the Trump administration seemed serious about reaching a trade deal with China.
Feb. 5, 2018
In February, stocks showed real signs of weakness for the first time in Trump’s presidency, falling by more than 10 per cent from their high in January. Fears of inflation and higher interest rates, prompted by a strong jobs report, set off the selling.
Feb. 15, 2018
It became clear that Trump was serious about pursuing bellicose trade actions against many of the United States’ biggest trading partners. Investors worried that a global trade war was looming.
March 22, 2018
Trump’s proposal for tariffs on imports from China helped drive the S&P 500 down 4.5 per cent over two days.
April 1, 2018
But starting in April, the S&P 500 posted monthly gains for six straight months.
April 16, 2018
Trump said increases in U.S. interest rates were “not acceptable.” Later in the year, as stocks tumbled, he ramped up his criticism of the Fed’s monetary policy decisions, unnerving investors along the way.
Aug. 22, 2018
The bull run in stocks that began in 2009 became the longest in recent history, by one measure. In a tweet, Trump congratulated America.
Sept. 20, 2018
The S&P 500 hit its all-time high of 2,390.75. With an eye on the midterm elections, Trump tweeted, “Financial and jobs numbers are fantastic.”
Oct. 3, 2018
Tensions with China and comments by the Federal Reserve chairman, Jerome Powell, about rising borrowing costs helped crater stocks, which suffered their steepest declines since the February rout. Trump lashed out at the Fed: “They are raising interest rates and it’s ridiculous.”
Dec. 4, 2018
Trump tweeted that he was a “Tariff Man.” Stocks fell 3.2 per cent.
Dec. 24, 2018
Trump again criticized the Fed. Stocks closed 19.8 per cent below their September high — just shy of a 20-per-cent decline that would have ended the record bull run.
Jan. 18, 2019
On the last trading day of Trump’s second year in office, the S&P 500 closed down 9 per cent since the market’s peak in 2018, but up 25 percent since he was elected.