On Thursday, Donald Trump stood on Wall Street before an enthusiastic gathering of America’s business elite and rang the bell to commence the morning’s stock market trading. The atmosphere was jubilant. Not only had the president-elect recently been named Time’s Person of the Year, but the stock market, already on a strong upward trajectory, had soared to new heights since his election.
For Trump, whose public appearances have been relatively infrequent since his victory last month, the visit underscored the importance he places on market perceptions. However, whether history will view his appearance as the well-timed introduction of another economic boom or as a precursor to a downturn remains uncertain.
Trump is taking office with a U.S. economy that Jerome Powell, the head of America’s central bank, recently described as the envy of many nations. The economy boasts robust 2.8% growth, unemployment hovering near historic lows at 4.2%, and soaring productivity.
These factors have propelled American stocks to unprecedented heights: The Dow Jones Industrial Average is on course to end the year up over 17%. The S&P 500, comprising America’s 500 largest companies, has surged 28% since January, while the tech-heavy Nasdaq has soared more than 40%.
Investors are optimistic for further gains, anticipating the Trump administration will ease regulations and approve takeovers that might have faced stringent scrutiny during President Joe Biden’s tenure.
On Thursday, the stock exchange was filled with prominent business figures, including Goldman Sachs CEO David Solomon and Target CEO Brian Cornell. They greeted the president-elect with prolonged applause and whistles, eventually breaking into chants of “USA! USA!”
His visit represented a relatively rare appearance by a sitting or former president.
However, analysts have cautioned that maintaining the current market highs might prove challenging in the coming year. Job creation is already slowing, and price inflation remains persistently high.
Many of Trump’s proposed policies—such as reducing government spending significantly, implementing extensive trade barriers, and pursuing mass deportations of migrants—could further hinder growth if put into action.
While there is ongoing debate about the extent to which the president will implement these initiatives, they are generating uncertainty and could lead to significant disruptions, according to Mark Zandi, chief economist at Moody’s Analytics. “If executed to the extent that the president has outlined, the overall impact of these policies could be problematic for the economy,” he stated.
At the stock exchange on Thursday, Trump focused his remarks on aspects of his agenda more appealing to markets: pledges to reduce corporate taxes from 21% to 15% for businesses manufacturing in the U.S., cut regulations, and expedite government approvals.
“A nuclear power plant—I think a week should be enough time. What do you think?” he joked, prompting laughter from the audience.
Similar policies, which Zandi noted would benefit corporate profits, if not necessarily the broader economy, significantly boosted share prices during Trump’s first term. He frequently cited these market gains as evidence of his administration’s success, particularly early on.
However, the market experienced setbacks during trade conflicts with allies and China, and plummeted at the onset of the COVID-19 pandemic before making a rapid recovery. Ultimately, the S&P 500 rose by over 67% during his presidency—though this record was surpassed by Bill Clinton in the 1990s and Barack Obama in his first four years.
Under Biden, the index has increased by 59% so far. Whether Trump can replicate that performance is something he has refrained from predicting.
On Thursday, the major U.S. stock indexes closed lower, with the S&P 500, Dow Jones Industrial Average, and Nasdaq each declining around 0.5%.
When asked at the stock exchange what investments investors should consider for the future, Trump, in an uncharacteristic moment, hesitated. “I don’t want to suggest anything that might lead to a dip,” he said, before adding, “Long term, this country is going to be unlike any other.”
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