MW Trump's first 50 days: Stocks heading toward worst start to a presidential term since 2009

By Isabel Wang

Market volatility is likely to persist until there's greater clarity on Trump's tariff policy: Glenmede

The U.S. stock market has been on a roller-coaster ride ever since Donald Trump returned to the White House as the 47th president of the United States. The first 50 days of his second term have brought heightened volatility to financial markets already worried about slowing economic growth in the world's largest economy.

U.S. stocks are on pace for their weakest first 50 days of a presidency since 2009 - when Barack Obama assumed the presidency in the midst of the global financial crisis - according to Dow Jones Market Data. As of Monday morning, the large-cap S&P 500 index SPX had tumbled 5.6% since Jan. 20, while the tech-heavy Nasdaq Composite COMP had slumped over 10% and the Dow Jones Industrial Average DJIA was off 2.6% in the same period, according to FactSet data.

History shows that stocks have tended to fall in the first 50 days of a presidential term. Since 1953, the S&P 500 has delivered an average return of minus 0.4% during this period, while the Nasdaq has logged an average 3.1% slump in the 50-day span. The blue-chip Dow has registered a modest 0.5% average gain in the same 50-day period since inaugurations dating back to 1953, according to Dow Jones Market Data (see table below).

Stocks have been on a bumpy ride in the early months of 2025. The Cboe Volatility Index VIX - known as the VIX or Wall Street's "fear gauge" - has surged over 53% so far this year to trade at 26.66 on Monday morning, its highest level since Dec. 18, according to FactSet data. In general, a VIX reading below 20 suggests a perceived low-risk environment in the financial markets, while a reading above 20 is indicative of a period of higher volatility.

But that fear isn't appearing out of thin air. Recent data suggest the U.S. economy may be shrinking, with the Atlanta Fed's GDPNow model last week estimating that the economy will shrink at a 2.8% annualized rate in the first quarter of 2025. The unemployment rate also crept up to 4.1% in February from 4.0% in the prior month, according to the Bureau of Labor Statistics.

Investors have also fretted about a budding global trade war after Trump ratcheted up tariff tensions with major U.S. trading partners over the past month, which raised concerns over higher prices for a range of products that would put more financial stress on U.S. consumers and businesses still grappling with residual inflation.

As a result, Wall Street's euphoric outlook has largely faded at the beginning of 2025, with some investors shoring up portfolios with defensive names amid heightened concerns around a possible mix of resurgent inflation and stagnating economic growth.

See: Investors are anxious about Trump's tariffs. Here's what financial advisers are telling them to do.

To be sure, Trump also began his first presidential term with immediate, high-profile actions in 2017. But during his first 50 days in office, the S&P 500 climbed 4.8%, while the Nasdaq surged 5.8% and the Dow jumped 5.9% in the same period, according to Dow Jones Market Data.

So what makes this time different?

Hopes were running high on Wall Street after Trump won the presidential election in early November, as investors overwhelmingly focused on how pro-growth policies such as tax cuts and deregulation could boost the outlook for the world's largest economy. But so far, little haas emerged in terms of concrete policies on those fronts, while Trump's tariffs have taken center stage. In turn, the S&P 500 wiped out all of its postelection gains last week, while the Nasdaq fell into correction territory on Thursday.

"Markets continue to prove sensitive to trade policy, as considerable uncertainty remains over the size and scope of tariffs to be implemented," said Jason Pride and Michael Reynolds, investment strategists at Glenmede.

"Just as important may be how long the tariffs stay on. Are they temporary in order to extract concessions, or are they a new permanent fixture of U.S. trade policy? Until there's greater clarity on these key questions, market volatility is likely to persist," the Glenmede strategists said in emailed commentary on Monday.

U.S. stocks were still under pressure on Monday, with the S&P 500 off more than 2% and the Nasdaq tumbling over 3.5% as of 12:30 p.m. Eastern time. The Dow was falling 1.3%, according to FactSet data.

-Isabel Wang

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

March 10, 2025 13:02 ET (17:02 GMT)

Copyright (c) 2025 Dow Jones & Company, Inc.