Trump Must Deliver ‘Tangible Progress’ in First 100 Days for Stock Market to Rally
As Donald Trump embarks on his second term as the 47th president of the United States, all eyes are on him and the financial markets. The first 100 days of any presidential term is a critical time for demonstrating leadership and ushering in policy changes. History has generally shown that stock markets tend to rally during this initial period, and Trump’s administration better deliver tangible results or risk facing a significant reset in market valuations.
The Historical Context
Since 1929, we’ve seen the S&P 500 index average a robust return of 3.8% in a president’s first 100 days, while the Dow Jones Industrial Average (DJIA) has managed an even healthier 4% increase. Notably, these indices finished higher 58.3% of the time during this timeframe, according to data from Dow Jones Market Data. The NASDAQ Composite, in contrast, has not fared as well, recording a modest decline of 0.7% when its performance is tracked back to 1973.
Expectations for Trump’s Second Term
Trump’s electoral victory last November has reignited optimism on Wall Street—investors are particularly eager to see how he will tackle critical issues such as tariffs, cryptocurrency, energy policy, and immigration. These policies could have profound implications for economic growth in America.
As his first term showed, immediate and high-profile actions are often taken within the initial months of a presidency. During his first 100 days in office in 2017, the S&P 500 climbed 5.3%, and the DJIA surged 6.1%. The financial community is cautiously hopeful that this pattern will persist, despite the inherent unpredictability in the markets.
The Importance of Tangible Progress
If Trump expects to maintain investor confidence, he needs to provide substantial and measurable progress in the early months of 2025. Adrian Helfert, Chief Investment Officer of Westwood Holdings Group, emphasized this point: “The first 100 days of Trump’s second term will need to deliver tangible, measurable progress.”
As the economy is often likened to a “supertanker” that can’t change direction swiftly, it’s essential for immediate policies to materialize and impact economic data. Investors will be on the lookout for key indicators such as improving business sentiment, increased capital investments, and favorable data from leading economic indicators. Without these signals by spring 2025, Helfert warns that market valuations, already hovering above historical averages, may be in for a serious adjustment.
Market Reactions
On January 21, 2025, the stock markets reacted positively to Trump’s swearing-in, with the S&P 500 advancing 0.9% to close at 6,049.24, the DJIA soaring 1.2%, and the NASDAQ rising by 0.6%, as per data from FactSet. However, the initial euphoria must be matched by sustained economic indicators to ensure long-term growth rather than fleeting optimism.
The Road Ahead
Trump’s second term provides a unique opportunity for the Republican agenda, but it will require disciplined execution to translate electoral victories into economic achievements. As we look ahead, it’s crucial to monitor whether Trump can maintain the momentum he has built and if his administration can successfully navigate the complexities of governance in the current socio-political landscape.
The upcoming months could very well determine the trajectory not just for the markets, but for the entire U.S. economy. For investors who value traditional financial principles, the stakes have never been higher. The clock is ticking, Mr. Trump; it’s time to deliver.
