MW Trump's first 100 days in office are worst for stock market in half a century

By Isabel Wang

S&P 500 has fallen an average of 5.5% in years when first 100 days of a presidency produce subpar return, data shows

U.S. stocks were on pace to close out Donald Trump's first 100 days back in the Oval Office on a sour note, with the president's trade policies taking the blame for derailing a thriving market and stoking fears the world's largest economy could slip toward recession.

Tuesday marks the 100th day of Trump's second presidential term. The S&P 500 SPX is poised for its worst first-100-day performance for a new administration in over 50 years.

The large-cap benchmark index has tumbled nearly 8% since Inauguration Day on Jan. 20, while the Dow Jones Industrial Average DJIA has slumped 7.5% in the same period, though both are well off the lows seen earlier this month. The blue-chip index is also on track to see its worst first 100 days since Richard Nixon's second term in 1973 (see table below).

The Nasdaq Composite COMP, meanwhile, has slumped 11.5% since Inauguration Day, and is headed for its worst first 100 days of a presidency since George W. Bush's first term in 2001, according to Dow Jones Market Data.

Traditionally, the first 100 days of a U.S. president's term are an important period for implementing key policy changes and demonstrating their leadership in the White House. Financial-market investors also use this period to gauge the policy direction of the new administration and price in the potential economic impact over the next four years.

History shows that stocks have tended to rise in the first 100 days of a presidential term. Since 1929, the S&P 500 has delivered an average return of 3.8% during this period, while the Dow has averaged a 4% advance in the 100-day span. Both the S&P 500 and the Dow have finished higher 58.3% of the time, according to Dow Jones Market Data.

So why is this time different?

See: Where Trump's tariffs and economic promises stand as he nears 100 days in office

First of all, hopes were running high on Wall Street even before Trump took the oath of office for a second time, as investors overwhelmingly focused on how pro-growth policies such as tax cuts and deregulation could boost the outlook for the U.S. economy. But so far, little has emerged in terms of concrete policies on those fronts.

Stocks held up in the weeks after Trump's inauguration, with the S&P 500 at one point posting its strongest start to a presidential term since 2013. Not even concerns that Chinese startup DeepSeek could challenge American dominance in the AI race were enough to derail the stock rally.

But the reaction to Trump's aggressive and far-reaching tariff policies has ended up driving market performance over his first 100 days back in office, bringing heightened volatility to financial markets already worried about slowing economic growth.

Notably, U.S. stocks have swung wildly this month after Trump, in an announcement in the White House Rose Garden after the market closed on April 2, announced so-called reciprocal tariffs on imports from about 90 nations. He also escalated trade tensions with China, raising the tariff rate on Chinese imports to 145%.

Stocks fell hard immediately after April 2. The S&P 500 dropped over 12.1% in the following four sessions, marking its steepest four-day slide since the early days of the COVID-19 pandemic in March 2020, and left the large-cap benchmark down 18.9% from its Feb. 19 record finish - on the brink of a 20% pullback that would mark a bear market.

The tariff uncertainty, along with the widespread federal job cuts and the push to deport undocumented immigrants, plunged the Nasdaq Composite into bear-market territory and pushed the S&P 500 and the Dow into correction territory.

Stocks bounced on April 9 when Trump paused most reciprocal tariffs other than those on China, with the S&P 500 jumping 9.5% for its largest one-day rise since Oct. 28, 2008. The S&P 500 has recovered a chunk of its post-"liberation day" losses since then, last week exiting correction territory after logging three straight sessions of extra-large gains.

See: What Trump's next 100 days will mean for taxes, markets and your wallet

"Usually the first 100 days [of a presidency] would give investors a sense of policy changes to come in D.C., so there's an adjustment in markets where investors learn the areas the new administration will focus on, and how aggressively they're going to pursue them," said Callie Cox, chief market strategist at Ritholtz Wealth Management.

"There was a month of [markets] processing, and then there was initial shock" after the tariff announcements, she told MarketWatch via phone on Monday. "Policies are already in place, now investors want to know: What are the economic repercussions of the policies that have been set?"

In Cox's view, the extreme volatility in the stock market over the past 100 days might be a healthy wake-up call for investors accustomed to double-digit gains over the past two years.

"The initial shot always hurts the worst ... but we have had a chance to prepare ourselves for what could be coming [after 100 days]. So in that perspective, I'm a little more encouraged for the days ahead," she added.

With the first 100 days nearly in the books, investors want to know what history indicates about what comes next.

Since World War II, the S&P 500 rose an average of 3.2% during the next 100 days of a presidency, and was higher 65% of the time, said Sam Stovall, chief investment strategist at CFRA Research.

However, a below-average first 100 days of a presidency has been followed by full-year average decline of 5.5%, with stocks rising just 33% of the time. A below-average return for the next 100 days has been followed on average by a decline of 3.7% for the year, with stocks up 30% of the time, Stovall said in a Monday client note.

Mark Malek, chief investment officer at Siebert Financial, said that while investors may not gain much clarity on tariff policy over the next 100 days, they will soon feel tariffs bite in the economy.

"We are going to see some of the hard economic numbers and earnings results start to reflect some of these trade tensions in the next 100 to 200 days," he told MarketWatch in a phone interview on Monday.

U.S. stocks were higher on Tuesday morning. The Dow was rising over 200 points, or 0.5%, while the S&P 500 and the Nasdaq were each gaining 0.3%, 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.

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April 29, 2025 11:11 ET (15:11 GMT)

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