Market Performance Under Trump
Under President Donald Trump’s first term from January 2017, the Dow Jones Industrial Average gained 57%, the S&P 500 increased by 70%, and the Nasdaq Composite surged 142%. These trends have continued into his second term, with all three indexes reporting double-digit gains since January 20, 2025.
The Tax Cuts and Jobs Act (TCJA), enacted in December 2017, lowered the peak marginal corporate income tax rate from 35% to 21%, enabling S&P 500 companies to repurchase nearly $7 trillion in shares between 2018 and 2025, with projections of $1.2 trillion for 2025 alone. In stark contrast, annual buybacks from 2011 to 2017 ranged between $413 billion and $592 billion.
Despite this unprecedented surge in buybacks, concerns loom over a potential AI market bubble and an elevated Shiller P/E Ratio, surpassing 40—the highest since 2000. History suggests that valuations above 30 often precede significant market corrections, raising questions about the sustainability of current stock market gains.
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