President Donald Trump has become synonymous with stock market volatility, presiding over extraordinary highs while also triggering significant declines. During the early weeks of his second term, the S&P 500 saw one of the swiftest corrections since World War II, mainly due to uncertainties surrounding his tariff policies. Just weeks after a major tariff announcement, the index was perilously close to falling into bear market territory.
A correction, defined as a drop of at least 10% but less than 20% from a recent peak, contrasted starkly with a bear market, marked by a fall of 20% or more. However, under Trump’s administration, recoveries have outpaced historical norms. According to CFRA Research, pullbacks of 5% to 9.9% from recent peaks have rebounded more quickly than under any president dating back to Ronald Reagan, with the average recovery time dropping below the median of 34 days.
Historically, bear markets are swift, whereas bull markets are gradual. “The bull market takes the stairs, whereas bear markets take the elevator,” said Sam Stovall, CFRA’s chief investment strategist. In Trump’s second term, the S&P 500 rebounded from a 9.1% decline in only 16 calendar days, ranking among the fastest recoveries since the end of World War II.
This rapid recovery was bolstered by impressive earnings growth, with first-quarter results showing over 20% year-on-year growth for S&P 500 companies, marking one of the strongest profit expansions since late 2021. This environment of solid profits, combined with enthusiasm surrounding artificial intelligence, contributed to a market rebound initially fueled by hopes for a swift resolution to rising tensions between the U.S. and Iran. However, the ceasefire’s stability came into question, as Trump described it as being “on life support.”
Investors are increasingly navigating a market heavily influenced by news cycles. “We’ve been in a very headline-driven world, headline-driven market,” said Carson Group Chief Market Strategist Ryan Detrick. He urges investors to seize opportunities during market dips, asserting that a global bull market may still be in its early stages. Detrick noted a generational shift on Wall Street; younger investors are conditioned to view significant market downturns as buying opportunities rather than points for caution.
Meanwhile, the influence of Trump’s presidency has altered the dynamics of trading on Wall Street. Institutional investors are less inclined to sell aggressively, having learned that holding onto assets tends to yield better results than flinching at market signals. “FOMO is a very real thing for an institutional investor,” said Steve Sosnick, chief strategist at Interactive Brokers.
Data from Fundstrat indicates that Trump has influenced an unprecedented number of the market’s best and worst trading days during his tenure, with the S&P 500’s best day occurring on April 9, 2025, after he paused tariffs, leading to a 9% surge. Conversely, the worst day was on April 4, 2025, following Chinese retaliatory measures. If not for Trump’s influence on these days, the S&P 500 would show only marginal growth since his second inauguration.
Hardika Singh, an economic strategist at Fundstrat Global Advisors, asserts that Trump’s hands-on approach has fundamentally reshaped investment strategies. She emphasizes the need to adapt to the current market environment, advising, “Don’t fight the White House, because you’re going to lose.”
Trump’s rapid-fire communication style, particularly through social media, has contributed to market fluctuations and has likely set a new standard for how future presidents communicate with Wall Street. Matt Gertken, chief geopolitical strategist at BCA Research, suggests that the volatility is here to stay, stating, “There’s no going back.” Future leaders may find themselves compelled to engage with the market more frequently to navigate the speculations driven by day-to-day news.
