- S&P 500 has risen 28pc since Trump’s election in Nov 2016
SAN FRANCISCO: US President Donald Trump has taken credit for the stock market’s gains during his nearly two years in the White House, and those claims are reasonable given the impact of tax cuts and pro-business policies on investor sentiment.
The S&P 500 has risen 28 per cent since Trump’s election in November 2016 to the eve of congressional midterm elections on Tuesday. This surpasses the market’s performance over the same time frame under any other president in the past 64 years. Under President Dwight Eisenhower, the S&P 500 rose 29 per cent from his election in November 1952 through November 1954.
Sweeping corporate tax cuts, an initiative driven by Trump, supercharged US companies’ earnings and helped lift the cash-rich technology sector. The Republican party last year passed the biggest overhaul of the US tax code in over 30 years, boosting US corporate earnings.
Still, other sectors that could have been expected to benefit strongly from a Trump presidency have lagged. Indeed, the individual stocks that have gained and lost the most during his reign have little discernable link to Trump’s presidency.
How the market shakes out in the final two years of Trump’s presidency will probably be influenced by Tuesday’s elections. Analysts expect pressure on stocks if Democrats gain control of the House of Representatives and a sharper downward reaction if they sweep the House and Senate. On the contrary, if Republicans hold their ground, stocks could gain further, with hopes of more tax reform ahead.
Trump’s strong stock market record has been maintained even after a recent pullback on Wall Street as worries about trade battles, inflation and rising interest rates have increased caution among investors. Starting in 2010 under President Barack Obama as the world recovered from the financial crisis, the S&P 500 has enjoyed its longest bull market in history.
