Historical Market Performance Under President Trump
Stock market returns during Donald Trump's time in the White House have far outpaced long-term averages. Since his first, non-consecutive term, the Dow Jones Industrial Average, S&P 500, and Nasdaq Composite have posted significant gains. During the initial term, these indexes climbed 57%, 70%, and 142% respectively. Even with the transition back to power, markets continued to move upward, adding 23%, 28%, and 32% to those tallies by August 24, 2026.
But these record-setting streaks arrived with extreme volatility. The market suffered sharp, sudden drops that tested investor resolve. The 2020 pandemic crash saw the S&P 500 lose 34% of its value in just 33 days. More recently, in April 2025, a sudden shift in trade policy triggered a tariff tantrum that knocked 10% off the S&P 500 in two trading sessions. The question remains whether these gains are sustainable as the president faces a new set of geopolitical pressures.
Geopolitical Tensions and Market Shocks
President Trump's current term has coincided with a series of high-stakes international events. Beyond the tariff disputes, the U.S. engaged in military operations targeting Iranian nuclear facilities in June 2025. Following that conflict, in February 2026, the administration initiated further military actions against Iran. These events often trigger immediate market reactions, leaving analysts to look at historical data for clues on how long-term portfolios might fare.
Carson Group, led by Chief Market Strategist Ryan Detrick, tracked the performance of the S&P 500 following more than 36 shock events dating back to 1940. The data shows that the index gained an average of 3% one year after the start of such crises. Stocks finished higher 65% of the time. While these numbers offer a degree of comfort, historical averages do not account for the specific nature of current economic conditions.
The Energy Supply Dilemma
Historical data suggests a specific trigger for market downturns: energy supply disruption. The Suez Canal crisis in 1956 and the 1973 oil embargo serve as clear examples where major supply shocks led to significant market losses. Following the 1973 event, the S&P 500 fell 35% over the subsequent year. Today, the situation in the Strait of Hormuz presents a comparable risk. Iran’s closure of this shipping lane has halted roughly 20% of the world's daily petroleum supply.
This energy shock has caused inflation to stick in the broader economy. Core Personal Consumption Expenditures remain near 3.4% as companies pass on higher fuel and production costs to consumers. This persistent price pressure limits the chance for major market growth. Investors should prepare for a period where economic headwinds could lead to a significant pullback in major indexes. While history shows the market often recovers from shocks, the specific nature of this energy crisis introduces risks that investors have not navigated in decades.