Traders work on the New York Stock Exchange floor on Dec. 18, 2024.
Spencer Platt | Getty Images
The Trump bump could become the Trump slump.
The S&P 500’s return since Election Day has fallen to just around 0.5%. If that holds through Inauguration Day on Jan. 20, it will mark the worst performance for the broad index between an election and inauguration since Barack Obama came into the White House in 2009 amid the global financial crisis, according to data from Bespoke Investment Group.
S&P 500 since Election Day
Stocks soared to record highs following Donald Trump’s victory, as investors cheered the likelihood for tax cuts and deregulation that are considered beneficial for corporations. The Dow Jones Industrial Average, for example, surged more than 1,500 points in the session the day after Election Day.
But focus has since shifted back to inflation and the path of interest rates going forward, which has poured cold water on that rally. Excluding the one-day gain on the Wednesday after Election Day, the S&P 500 is actually down more than 1%.
This turn comes as indications of sticky inflation and spiking Treasury yields have left Trump’s path to the major economic changes he pitched more complicated. On Friday, the Bureau of Labor Statistics said the economy added 256,000 jobs in December — well above a Dow Jones estimate of 155,000.
Now, policymakers are questioning if his plans for wide-reaching tariffs or tax cuts will be feasible. If these policies can get across the finish line, some on Wall Street and in the Federal Reserve have indicated concern that they will contribute to inflation.
“President-elect Donald Trump’s incoming administration is … expected to bring a pro-growth agenda, less regulatory oversight, and potentially lower taxes,” Adam Turnquist, chief technical strategist at LPL Financial, wrote to clients this week. “Of course, some of these policies could be detrimental to inflation and the ballooning U.S. deficit.”