The Stock Market & Economy With A New President

The new Trump administration will inherit a robust economy. What will some of the proposed policies do for the economy?

SPY Stock January 2017 - Present

In January, 2017, the S&P 500 was at 2,275. When Trump left office in January, 2021, the S&P 500 was at 3,839: A difference of 1,564 for a 68.7% increase. Since then, the S&P 500 has climbed to its most recent highs of 6,015—at the time of this writing. This is a difference of 2,176 for an increase of 56.6% increase. Both of these numbers are extraordinary.

While the S&P 500 is a fairly solid report card on the overall health of the US economy, there are also other measures that should be considered. The pandemic, of course, transitioned the US economy. Employment is far greater now with the Biden administration than at any period of time during the first Trump administration. But, prices had catapulted upward owed to both breaks in the supply chain as well as companies having basically gouged consumers to the gills simply because they could—just look at the continual record profits companies have produced, which of course is the driving factor in the stock market’s all-time record highs.

The big mover for the stock market was two-fold with the lack of turbulence from the election as well as the continued tax breaks for businesses.

For now, inflation has been tackled and mostly tamed by the Federal Reserve—the driver of the money supply and the costs of money. Unemployment is off of its record lows, but still very low at ~4.1%.

There is a lot of noise going about with the possibilities of Trump’s future tariffs, and what that would mean for the economy. To be sure, if Trump does enact his sweeping tariffs, the American consumer will pay the price. In fact, in a study by CNBC on the previous tariffs, Steve Liesman found that the Trump tariffs acted like the biggest tax hike on US consumers in decades.