Investors closely monitor the U.S. stock market following Donald Trump’s inauguration for his second presidential term. Historically, the benchmark S&P 500 index has not performed strongly on average during inauguration days, particularly when they coincide with a market holiday. However, recent trends have been more positive, with Trump’s first inauguration in 2017 yielding a 0.34% gain, and Joe Biden’s 2021 inauguration seeing a 1.39% surge, the largest since Ronald Reagan’s second term in 1985.
Despite these recent gains, long-term data suggests a different pattern. Since 1949, the S&P 500 has averaged a 0.27% decline on inauguration days, while the Dow Jones Industrial Average has dropped by 0.24%. The Nasdaq Composite, launched in 1971, has experienced a more significant average decline of 0.35%. These figures indicate that while short-term movements may vary, historical trends lean toward a cautious market response.
The market’s reaction to Trump’s second-term inauguration will be closely watched, as it may signal investor confidence in his economic policies. Meanwhile, the ceremony itself was moved indoors due to freezing weather, dampening Trump’s plans for a grand public spectacle. Investors now await the first trading session post-inauguration to assess how equities respond to the renewed Trump administration.
Source: PUNCH