Stock market grew in 2025 — but less than any first year of a new presidency in two decades

• The 13.3% S&P 500 gain significantly trails Trump's first-term start of 24.1% in 2017, when the index hit 62 record highs compared to just 39 in 2025
• Market volatility spiked repeatedly due to Trump's shifting tariff announcements, with the VIX 'fear gauge' surging above 50 for the first time since the pandemic during the Greenland standoff
• Despite the slower growth, 2025 marks three consecutive years of strong gains, and Wall Street expects the S&P 500 to continue rising through 2026

Summary

The S&P 500 rose 13.3% during the first year of President Trump's second term (Jan. 20, 2024 - Jan. 20, 2025), marking the weakest first-year performance of any presidential administration since George W. Bush's second term in 2005. This contrasts sharply with Trump's first term, when the index surged 24.1% in year one.

Key Performance Metrics:

• 39 record highs in 2025 vs. 62 in 2017
• International stocks outperformed U.S. markets for the first time in years
• Gold surpassed $5,000 for the first time as investors sought safe-haven assets
• VIX volatility index exceeded 50, highest since the pandemic

Market Drivers:

The subdued performance follows back-to-back annual gains exceeding 20% through 2024—the first such occurrence since the 1990s. However, market volatility stemmed primarily from Trump's shifting tariff policies, including "Liberation Day" tariffs in April that triggered significant market swings. A Supreme Court decision on presidential authority regarding these tariffs is pending.

Key Factors:

• Tariff policy uncertainty and geopolitical tensions
• Greenland standoff rattling markets
• Dollar weakness driving investors to gold
• Strong corporate earnings and interest rate cuts providing support

Outlook:

Despite the relative weakness, analysts view 13.3% growth positively. Ken Mahoney of Mahoney Asset Management noted concerns about "multiple balls in the air" but emphasized opportunities in volatility. Wall Street expects continued S&P 500 gains through 2026, with 2025 marking the third consecutive year of strong market performance.