The three major American stock indices performed well in the first year President Trump returned to office, with the Dow Jones, the S&P 500, and the NASDAQ Composite all posting double-digit gains for 2025.
This is despite the fact that in April, all of them were deeply in the red due to the new administration’s suddenly changing and unclear tariff policy. In early April, the Dow was down as much as 13 per cent year-to-date. However, as the harshest tariffs were lifted and new trade deals were being signed by foreign nations (with the UK being the first in May), markets recovered, then grew significantly.
Also, the Federal Reserve cut the federal interest rates three times in a row from September to December, reducing them from 4.5 per cent to 3.75 per cent, which greatly helped the stock markets.
Two full trading days are left for the year. However, in the holiday season, trading volumes are reduced, and no new major information—such as earnings calls or inflation data—is published, thus significant swings in stock prices are unlikely.
As of market close on 29 December, the Dow is up 14.32 per cent YTD, the S&P 500 is up 17.67 per cent, and the NASDAQ Composite is up 21.75 per cent. All three major indices are set to post a larger annual gain in 2025 than their respective average annual returns over the four years of the Biden administration.
Between 2021 and 2024, the Dow returned an average 9.13 per cent annually, the S&P 500 returned 15.47, while the NASDAQ returned 18.09.
‘As of market close on 29 December, the Dow is up 14.32 per cent YTD, the S&P 500 is up 17.67 per cent, and the NASDAQ Composite is up 21.75 per cent’
The Dow also outperformed 2024, President Biden’s last year in office, this year, with President Trump back in office. In 2024, the primary US stock index grew by 12.88 per cent, while in 2025, as we wrote above, it is up by 14.32 per cent. However, the same cannot be said about the S&P 500, which returned 25.02 per cent last year, compared to this year’s 17.47 per cent growth; or the NASDAQ composite, which returned 24.88 per cent in 2024, as opposed to the current 21.75 YTD gain.
The Dow Jones returned an average 12.26 per cent per year during President Trump’s first term, between 2017 and 2020.
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