Five Charts That Explain Trump's Presidency So Far

As Donald Trump's second term as president begins, it's essential to examine the impact of his policies on the economy and the stock market. Here are five charts that help explain Trump's presidency so far:

1. S&P 500 Performance
The S&P 500 index has performed exceptionally well during Trump's first term, with annualized returns of 14.1% (YCharts, The American Presidency Project). This was the second-highest return among all U.S. presidents, behind only Bill Clinton. However, the current valuation portends weaker returns during Trump's second presidency.



2. Unemployment Rate
The unemployment rate fell to its lowest level in 50 years, 3.5%, in 2019. This was a continuation of the post-Great Recession economic expansion seen under the Obama administration. However, the COVID-19 pandemic led to a significant increase in unemployment, which has since recovered but remains higher than pre-pandemic levels.

3. Tariffs and Trade Balance
Trump's tariff policies have had a significant impact on the U.S. trade balance. While the trade deficit has narrowed, it has not eliminated it. Additionally, the tariffs have led to higher prices for consumers and businesses, as well as retaliation from other countries.

4. Corporate Earnings and Tax Cuts
The Tax Cuts and Jobs Act (TCJA) of 2017 reduced the corporate tax rate, leading to higher after-tax profits for corporations. This resulted in higher business investment and economic growth. However, the TCJA's provisions expire in 2025, which could impact corporate earnings and economic growth in the future.

5. Stock Market Volatility
The S&P 500 experienced periods of increased volatility during Trump's presidency, particularly during the COVID-19 pandemic and the subsequent market recovery. The two-day normalized decline in the VIX (CBOE Volatility Index) after the 2024 presidential election was one of its largest in the past decade, indicating a significant decrease in market uncertainty.



In conclusion, Trump's presidency has had a significant impact on the economy and the stock market. While his policies, such as tax cuts and deregulation, have contributed to economic growth and strong stock market performance, there have also been challenges and controversies, such as the impact of tariffs on specific sectors and the overall economy. As Trump begins his second term, investors should stay informed about his policies and their potential impact on the economy and the stock market.