Since Donald Trump took the oath of office as the 47th president of the United States, the stock market has seen a wild two weeks.
Although Trump bookended a turbulent week that started with worries that Chinese startup DeepSeek could challenge American companies’ dominance in the AI race with his long-awaited plans for applying tariffs, Wall Street had its best first nine trading days of a presidential term in more than ten years, much to the surprise of many.
Early this week, the AI advancements sparked a vicious slaughter of tech companies, with Nvidia Corp. (NVDA) losing more than $590 billion in market capitalization on Monday.
Nevertheless, since Inauguration Day, the S&P 500 SPX has increased by more than 0.7%. According to Dow Jones Market Data, the large-cap index had its best first nine trading days of a presidency since former President Barack Obama was sworn in for a second term in 2013 (see table below).
Trump’s second term began with a 2.4% increase in the Dow Jones Industrial Average (DJIA), which also saw its best first nine trading days since 2013. But according to Dow Jones Market Data, the tech-heavy Nasdaq Composite COMP hasn’t shifted much since Inauguration Day.
“Any dip is perceived as a buying opportunity, and every uptrend is perceived as something to follow,” according to Steve Sosnick, chief strategist at Interactive Brokers, despite the stock market’s soaring volatility.
Investors have been willing to ignore “the wall of worry” and concentrate on general optimism regarding Trump’s policy plans, such as deregulation and planned income tax cuts, because they still feel “invulnerable” as a robust bull run that has lasted for more than two years, Sosnick told MarketWatch over the phone on Friday.
Trump has signed a flurry of executive orders on immigration, energy, and artificial intelligence (AI) in the previous two weeks. One of these is the $500 billion Stargate initiative, which focuses on AI infrastructure and this week sent the S&P 500 to its first record close of 2025. Other government branches have already reacted negatively to some of his acts, but not before they had an impact on people’s lives both domestically and internationally, despite comparatively muted market reactions.
Indeed, Trump likewise took swift, well-publicized action in 2017 to start his first term as president. According to Dow Jones Market Data, the S&P 500 increased by 0.7% and the Nasdaq by 1.9% during his first nine trading days in office.
Investors were anticipating whether Trump will fulfill his pledge to levy tariffs on goods coming from China, Canada, and Mexico—the three biggest trading partners of the United States—on Saturday. Treasury rates BX:TMUBMUSD10Y hit their highest closing levels in a week on Friday after the White House press secretary announced that tariffs on certain nations would be implemented on February 1.
Tariffs will be “the most likely policy tool” that could affect markets in the near future, according to Carl Ludwigson, managing director at Bel Air Investment Advisors. This is because higher interest rates could cap equity multiples, which are already at “the high end” of the historical range, especially if tariffs, labor supply, and deficits are the causes of the rise in longer rates that finance the economy.
Accordingly, he stated in an emailed statement on Friday that profits growth, not prices, will be the factor that could propel the stock market forward this year.
Following confirmation by the White House that the Trump administration would impose fresh tariffs on Saturday, U.S. equities ended Friday’s trading session lower as the three main benchmark indexes relinquished their earlier gains. According to FactSet data, the Dow fell 0.8%, the Nasdaq lost 0.3%, and the S&P 500 closed 0.5% lower.
Despite the stock market decline in afternoon trade, Mark Hackett, chief market strategist at Nationwide, stated that the tariff news did not appear to be alarming investors just yet. In a phone interview with MarketWatch on Friday, he said, “There’s a lot of nervousness among investors, but they’re not hitting the panic button nor moving sidelines – investors this time are acting a little bit more skeptical, but not emotional” of Trump’s tariff policies.
“Eight years ago, we all had an experience when everyone practically swiped everything from the White House. In reference to Trump’s book from the 1980s, Hackett continued, “But this time, investors are incorporating some of ‘the Art of the Deal’ aspects of it.”
Even though Friday was the last day of a turbulent January on Wall Street, three main averages saw robust monthly gains: the Nasdaq rose 1.6%, the S&P 500 increased 2.7%. FactSet data shows that the Dow gained 4.7% during the month.
