Is Trump Bad for the Stock Market? A Guide for Traders

When traders ask if Donald Trump is bad for the stock market, they’re often missing the bigger question—how does any president influence short-term price action, volatility, and trading opportunities? As a trader, you should focus less on politics and more on how policies, news, and government actions create opportunity through volatility and price movements. The market reacts to uncertainty, and presidential actions—whether from Trump, Joe Biden, or anyone else—can fuel both fear and greed, which are the real drivers behind stock prices.

You should read this article because it explains how Trump’s policies affected market volatility, sector performance, and trader confidence.

I’ll answer the following questions:

1. Did the stock market perform well during Trump’s presidency?
2. How did Trump’s tariffs affect major industries like tech and energy?
3. What impact did Trump’s tax cuts have on corporate profits and stock prices?
4. Did Trump’s presidency lead to more stock market volatility?
5. How did Trump’s economic policies compare to Biden’s in terms of stock market performance?
6. Were there specific sectors that benefited or suffered under Trump’s trade policies?
7. What role did deregulation play in stock market trends during Trump’s time in office?
8. How has the stock market performed since the 2025 election?

Let’s get to the content!

Trump’s Impact on the Stock Market

Donald Trump’s time in the White House brought significant changes to the stock market through tariffs, tax reforms, and executive orders aimed at altering trade and business conditions. These moves created volatility that traders could capitalize on, while also causing uncertainty in markets as businesses and investors tried to adjust to fast-changing policy. Trump’s communication style and frequent use of social media to announce major policy shifts also created short-term swings in stocks, particularly in sensitive sectors like technology, energy, and banking.

During my years trading and teaching thousands of students, I’ve seen how these policy moves don’t just affect long-term investment—they open up short-term trading opportunities. The key is to focus on how news impacts price action, especially in lower-priced stocks that are more reactive. Understanding Trump’s influence means watching how his policies affected supply chains, tariffs on imports and exports, and investor sentiment about economic growth and stability.

Trump’s Tariff Proposals

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Trump’s tariff proposals were aimed at protecting U.S. industries by taxing imports from countries like China, Mexico, and nations in Europe. These tariffs hit sectors like the automobile industry and technology, where many companies rely on imported parts or manufacturing. Tariff announcements often triggered sharp reactions in the stock market, as traders responded to potential cost increases for companies and the risk of retaliatory tariffs on U.S. exports.

Tariffs added pressure to supply chains and disrupted expectations for company profits, particularly in the short term. From a trading perspective, these moves caused stock prices to spike or drop quickly, depending on the news cycle. When I teach trading, I emphasize reacting to news with discipline and a plan, because tariffs, while complex, often led to predictable overreactions in stock prices—especially in sectors tied to trade.

In many cases, smaller companies felt the tariff impact more sharply than large corporations. That’s because they had fewer resources to absorb higher costs or shift supply chains quickly. From a trader’s view, these small-cap stocks often showed more extreme price reactions, which created short-term opportunities. I teach my students to focus on volatility and liquidity, especially when tariffs are in the headlines. Knowing how to react quickly to tariff news—not predicting it, but reacting—is where skill and preparation pay off. Here’s more about how these trade decisions created trading opportunities: Trump’s effect on stock prices.

Tax Plans

Trump’s tax plans, especially the corporate tax cuts passed by congress in 2017, boosted profits for many U.S. companies by lowering the tax rate from 35% to 21%. This led to an increase in stock prices, especially in the financial sector, as companies had more money to spend on buybacks, dividends, and business expansion. Traders saw strong bullish trends during this time, especially in large-cap stocks.

The tax cuts also influenced small-cap stocks, which I focus on in my trading strategy. Many of these companies rallied simply because of the general optimism about economic growth and business-friendly government policies. However, the boost didn’t last forever, and traders had to adjust as markets priced in the news. Timing is everything, and in my experience, tax cuts provide an initial jolt, but traders need to understand when the hype fades.

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The Impact on the S&P 500

During Trump’s first term, the S&P 500 climbed from around 2,200 points at his inauguration to nearly 3,300 points by early 2020, before the COVID-19 crash. This growth reflected strong business profits, low interest rates, and aggressive stimulus efforts, including tax cuts and deregulation. While long-term investors might see this as a success, traders focused on the volatility, especially around trade wars and Federal Reserve tensions.

In my trading, I saw how the S&P 500’s moves influenced penny stocks and smaller companies, often creating sympathy plays or sector momentum. It’s not just about tracking the index—it’s about understanding how macro news influences smaller stock movements. The index gave a snapshot of confidence in Trump’s administration, but individual stock opportunities came from short-term reactions to news about tariffs, economic policy, and monetary decisions.

Stock Market Volatility During Trump’s Presidency

Stock market volatility during Trump’s presidency was high, driven by unexpected policy changes, trade war fears, and aggressive rhetoric toward foreign governments. Traders saw sharp sell-offs and quick recoveries, including major crashes like the COVID-19 market collapse and rebound in 2020. These large swings created opportunities for disciplined traders who understood how to react to volatility.

In my two decades of trading, I’ve learned that volatility is not something to fear—it’s something to use. Trump’s presidency offered plenty of volatile periods that rewarded prepared traders. Policy uncertainty and fast-changing economic signals shook investor confidence, but for short-term traders, that uncertainty led to big price moves and opportunities in sectors that reacted most to Trump’s policies, like energy, technology, and real estate.

Trump’s Economic Policies and the Stock Market

Trump’s economic policies, including tax cuts, deregulation, and public pressure on the Federal Reserve to lower interest rates, shaped stock prices by affecting corporate profits and monetary policy. These actions were designed to stimulate economic growth, and they often led to bullish sentiment in the markets, even if the longer-term impact on inflation and debt remained unclear.

I’ve seen how deregulation especially helped certain sectors like energy and banking, where fewer government restrictions meant higher short-term profits. At the same time, Trump’s tension with the Federal Reserve over interest rates added uncertainty, as traders tried to predict how monetary policy would evolve. My approach as a trader is to stay flexible and respond to the news, using it as a signal for price movements—not a prediction of where the market will go.

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Influence of Trade Policies on Various Market Sectors

Trump’s trade policies had a big impact on specific market sectors, as tariffs and export restrictions changed the way companies operated and planned for future growth. These policies influenced stock prices differently across industries, creating winners and losers depending on how exposed a business was to global trade. For traders, this meant watching sector-specific news and identifying which stocks would react the most to new trade agreements or conflicts.

In my teaching, I emphasize watching news catalysts that affect specific sectors, because those moves often start chain reactions in related stocks. Trump’s trade actions caused massive shifts in sectors like energy, technology, and automobiles, and those shifts created trading opportunities for those who stayed alert and ready to react.

Impact on the Automobile Industry

The automobile industry was hit hard by Trump’s tariffs on steel and aluminum imports, which increased production costs for U.S. car makers. At the same time, threats of tariffs on cars from Europe and Mexico caused uncertainty, leading to sharp movements in auto stocks. Companies like Ford and GM saw stock prices swing on tariff news, creating opportunities for short-term trades based on headlines.

Auto parts suppliers and related industries also reacted, making it important for traders to understand the ripple effect of trade policy. I’ve traded during periods where a single tweet about tariffs caused auto stocks to spike or drop within minutes. Traders who watched for these headlines and reacted quickly could find opportunities, while those who hesitated often missed the move.

Effects on Technology Stocks

Technology stocks faced challenges from Trump’s trade war with China, as many U.S. tech companies rely on imports from Asia and sell products globally. Tariffs on electronics and restrictions on Chinese tech firms created uncertainty for big names like Apple and smaller companies in the AI and data sectors. This led to sharp volatility in tech stocks, as traders tried to anticipate policy changes and supply chain disruptions.

During this time, I saw a lot of sympathy plays in the penny stock world, where smaller tech firms would spike or fall based on news about bigger companies. Traders need to understand that tech stocks are sensitive not just to tariffs, but also to regulation and data privacy laws. Trump’s efforts to regulate or restrict certain foreign tech firms led to price moves that created chances for quick gains for those prepared.

Beyond big names like Apple and Microsoft, many traders focused on contract manufacturers and component suppliers that were directly hit by tariffs. Stocks of these smaller firms often moved faster and more erratically than the tech giants. This volatility gave day traders chances to capitalize on short-term price moves. I remind my students that during times of regulatory uncertainty, it’s not just about the headline companies—it’s about the ripple effect through the supply chain. You can read more about how Trump-era trade policies influenced tech and other sectors here: Trump’s stock market impact.

Consequences for the Energy Sector

Trump’s deregulation of the energy sector, including efforts to expand oil and gas production and reduce environmental restrictions, boosted many energy stocks. Companies in oil drilling, natural gas, and pipeline infrastructure benefited from these policies, which traders saw reflected in rising stock prices and increased sector activity. However, the global energy market also faced headwinds from trade conflicts and shifts in supply and demand.

I’ve traded energy stocks during these swings, and I teach students to watch how government policy, environmental news, and global trade influence energy prices. Trump’s support for traditional energy sources led to bullish moves in some stocks, while also creating controversy and volatility. For traders, this sector offered opportunities because of constant news flow and large intraday price swings tied to policy and economic data.

Stock Market Under Trump vs. Biden Administrations

The main difference between the stock market under Trump and Biden is the focus of government policies—Trump’s aimed at deregulation and tax cuts, while Biden’s administration has emphasized regulation, green energy, and social programs. Both presidents influenced stock prices, but in different sectors and through different approaches. Traders saw different patterns of volatility, with Trump’s market reacting to trade wars and tax cuts, and Biden’s responding to spending bills, interest rate changes, and environmental regulations.

Under Trump, from his inauguration to the start of 2020, the stock market saw significant gains, with the Dow Jones rising over 40% and the S&P 500 hitting record highs before the COVID-19 crash. As a trader, I focus on how policy shifts affect price action. The Biden presidency brought new opportunities in sectors like technology, AI, and green energy, while Trump’s era favored traditional industries and low-regulation environments.

The differences between these administrations also changed how traders approached risk. Under Trump, sudden policy changes could cause sharp moves, which favored short-term trading strategies. Under Biden, more structured policy rollouts allowed for longer holding periods in some sectors. I always tell traders to adapt—don’t get locked into one style or sector. Recognizing which policies favor quick price reactions helps traders adjust their plans. Comparing the two eras helps highlight how news and government action shape price action. Here’s a look at how these differences matter for traders: Biden vs. Trump market impact.

Key Takeaways

Presidents influence the stock market, but traders must focus on price action, not politics. Trump’s time in office created volatility through tariffs, tax cuts, and deregulation, leading to trading opportunities across many sectors. Staying alert to news and understanding how policy impacts price is critical for short-term success.

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Frequently Asked Questions

Did the stock market do well under Trump?

Yes, the stock market performed well during much of Trump’s presidency, with major indexes like the S&P 500 and Dow Jones hitting record highs before the COVID-19 crash. Tax cuts and deregulation boosted business profits, but trade wars created volatility.

Is Trump bad for the stock market?

Trump is not inherently bad for the stock market, but his policies created uncertainty and short-term volatility. For traders, this volatility provided opportunities, while long-term investors had to weigh the risks of policy shifts.

How has the stock market been performing since the election of 2025?

Since the 2025 election, the stock market has reacted to new policies, Federal Reserve interest rate decisions, and global economic trends. Traders should focus on how these factors affect price action in specific sectors and stay alert for opportunities driven by news.

How did Trump’s campaign promises affect stock prices?

Trump’s campaign focused on tax cuts, deregulation, and protecting U.S. industries, which led to bullish reactions in sectors like energy and banking. Traders responded to his promises with speculation about future profits and changes in business conditions, especially during the 2016 election cycle. Stock prices often moved quickly based on expectations, not just official policy.

What was the impact of Trump’s policies on loans and mortgages?

Trump’s deregulation efforts in the banking sector aimed to make loans and mortgages more accessible, benefiting financial institutions and real estate businesses. This led to stock price increases for some banks and mortgage lenders, as markets anticipated higher revenue from lending activity. However, for consumers, easier access to credit also raised concerns about long-term debt levels and financial stability.

How did Trump’s actions affect consumers, funds, and money flow?

Tax cuts and rising stock prices under Trump boosted consumer confidence and increased money flow into mutual funds and trading accounts. Traders saw more volume and volatility as funds chased returns, creating more opportunities for short-term moves. Insurance companies also saw changes, as regulatory shifts influenced consumer behavior and corporate strategies in the financial sector.

What influence did Trump have on U.S. trade with the UK and natural resources?

Trump’s trade focus was primarily on China and Mexico, but U.S.-UK trade talks included discussions about resources like energy and raw materials. Delays in reaching agreements created uncertainty, affecting companies reliant on exports and imports with the UK. Stock prices in resource-based sectors reflected these developments, with traders watching news for reactions.

How did Trump’s team respond to delays and CEO concerns about stock value?

In several cases, delays in policy implementation caused concern among CEOs about lost value and missed business goals. Trump’s administration often responded with executive orders or public statements aimed at reassuring markets and pushing forward their agenda. Traders had to assess each case carefully, using charts and historical patterns to evaluate the likely impact on stock prices.

How did stock market history influence trader response during Trump’s presidency?

Traders looked at stock market history, especially past responses to tariffs and tax cuts, to guide their trading decisions during Trump’s presidency. Historical charts showed patterns of market reaction to similar policies, helping traders plan entries and exits. The market’s response to Trump’s actions often followed historical behavior, with quick moves after policy announcements or votes in congress.

How did voter response and government actions impact stocks during Trump’s time in office?

Public vote outcomes, such as the 2016 election and midterms, triggered major stock moves as traders adjusted to expected changes in government policy. The Trump administration’s fast response to political events—through executive orders or public statements—added fuel to market volatility. Traders focused on how each government action might shift stock prices, especially in sectors directly tied to policy changes.