The S&P 500’s return since Election Day has fallen to around 0.5%. If this trend holds through Inauguration Day, it will mark the worst performance for the broad index between an election and inauguration since Barack Obama took office in 2009.
Following Donald Trump’s victory, stocks surged to record highs as investors expected tax cuts and deregulation benefits for corporations. However, recent shifts in focus have poured cold water on this rally. The S&P 500 is down more than 1% excluding a one-day gain after Election Day, with sticky inflation and spiking Treasury yields complicating Trump’s plans.
The economy added 256,000 jobs in December, exceeding expectations. This has left policymakers questioning the feasibility of Trump’s pro-growth agenda, which includes wide-reaching tariffs and tax cuts. Some on Wall Street and in the Federal Reserve have expressed concern that these policies could contribute to inflation and a ballooning U.S. deficit.
As President-elect Donald Trump prepares to take office, his administration’s pro-growth agenda is expected to bring less regulatory oversight and potentially lower taxes. However, Adam Turnquist, chief technical strategist at LPL Financial, notes that some of these policies could be detrimental to inflation and the U.S. deficit.
Source: https://www.cnbc.com/2025/01/10/trumps-election-market-bump-close-to-being-wiped-out.html