Trump's return to the White House puts pressure on US stocks: S&P 500 records its worst performance for the same period in history, the dollar depreciates by 5.52%

After President Trump returned to the White House in January 2025 for his second term, the financial markets reacted swiftly to his policies. The S&P 500 index fell by about 10% within the first 94 days of his second term, marking the worst performance for any president in the same timeframe since 1928. A survey by the American Association of Individual Investors showed that the bearish sentiment exceeded 50% for nine consecutive weeks, setting a record for the longest streak of pessimism in history. The US Dollar Index depreciated by a cumulative 5.52% since Trump returned to office, the worst among all presidents during the same period, indicating the financial market pressures faced at the start of Trump's second term.

S&P 500 Index Decline Sets Worst Historical Performance for the Same Period

According to reports from The Wall Street Journal and United Daily News, since Trump took office in January 2025, the S&P 500 index has fallen by about 10%. This decline not only reflects market concerns about his policy direction but also sets the worst performance within the first 94 days of any U.S. president's term since 1928. According to Reuters chart data, this downward trend intensified after Trump announced a new round of tariff policies on April 2, and although the market slightly rebounded afterward, it remains in negative territory overall.

During his first term, Trump frequently used stock market performance as a measure of his achievements, claiming that the S&P 500 index rose by 88%. In reality, historical data shows that the index rose by about 67% during his first term, higher than Biden's 56%, but still below Obama's first-term performance.

Retail Investor Sentiment Hits Record Low

As the market declines, retail investor sentiment has also hit a low point. According to data released by the American Association of Individual Investors (AAII) on April 24, 2025, the proportion of retail investors expecting the U.S. stock market to decline over the next six months was 55.6% for the week ending April 23, slightly down from 56.9% the previous week, but marking the ninth consecutive week above 50%, setting the longest pessimistic record since the indicator began in 1987.

Additionally, according to analysis by Capriole and Argent Financial, the AAII's optimism indicator was only 25.4%, far below the historical average of 37.5%. This extreme sentiment reflects deep investor unease about market prospects, comparable to the sentiment levels during the 2009 financial crisis and the early stages of the 2020 COVID-19 pandemic.

CNN's "Fear & Greed Index" also shows market sentiment leaning towards the fear range, further confirming concerns about policy uncertainty and economic outlook.

U.S. Dollar Index Depreciates 5.52%, Worst Performance for Any President's Term

According to reports from Bespoke Investment Group and MoneyDJ, since Trump took office in January 2025, the U.S. Dollar Index (DXY) has cumulatively fallen by 5.52%, marking the worst performance for any U.S. president's term. This decline surpasses the performance during Trump's first term, when the dollar also experienced significant depreciation.

The weakening of the dollar is closely related to Trump's trade policies. Recently, Trump announced reciprocal tariffs on most countries and maintained a high-tariff stance on China, sparking market concerns about inflation and economic slowdown. Although Trump later softened his stance towards Federal Reserve Chairman Powell and postponed some tariff measures, the dollar has not stopped declining.

According to Trading Economics data, as of April 24, the U.S. Dollar Index was at 99.41, down 0.43% from the previous trading day. The dollar has significantly depreciated against the euro, pound, and yen, indicating that concerns about U.S. policy stability have spread to the foreign exchange market.

Policy Uncertainty and Market Pressure Intertwined

The volatility of Trump administration policies is seen as one of the main sources of market fluctuations. According to reports from Reuters and The Wall Street Journal, after announcing tariff policies, Trump postponed some measures due to the market's strong reaction and publicly stated that he had no intention of firing Federal Reserve Chairman Powell. These actions temporarily boosted market confidence but failed to reverse the overall downward trend.

Additionally, according to analysis by the American Enterprise Institute (AEI) and the Pew Research Center, Trump's economic policy approval rating has fallen to its lowest point during his term. A Reuters/Ipsos poll in April showed that only 37% of Americans approve of his economic governance, a significant decline from the same period last year.

Retail Participation and Market Structure Changes

Despite the gloomy market sentiment, American household participation in financial markets continues to rise. According to data from the Investment Company Institute (ICI), 53.7% of American households held mutual funds in 2024, significantly higher than 45.3% in 2010 and 5.7% in 1980. This indicates that retail investors are playing an increasingly important role in the market, making sentiment indicators like the AAII and CNN Fear & Greed Index important tools for observing market trends.

References

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