The Trump Era: Tension in the Markets After Inauguration

Investors are eagerly watching developments in the stock markets as Donald Trump begins his second term in the White House. The question arises whether U.S. stocks will again follow their trend of recording gains the day after an inauguration. Historically, the leading index S&P 500 has not always performed positively on inauguration days or directly afterwards, if the day coincided with a stock market holiday. Nevertheless, the last three inaugurations have all yielded gains. Trump's first inauguration in 2017 led to an increase of 0.34% in the S&P 500. At Joe Biden's swearing-in, the index even achieved a gain of 1.39%, the largest since Ronald Reagan's second inauguration in 1985. In the long term, however, the index shows an average decline of 0.27%, based on data since 1949. For the Dow Jones Industrial Average, the average decline is 0.24%, while the more recent Nasdaq Composite records an average decline of 0.35%.