The S&P 500 has risen 27.6% from Trump’s second inauguration through Friday’s close, compared with a 28.5% gain over the same period of his first presidency, it added. The gap has narrowed since the first year of Trump’s second term, when the benchmark was trailing his earlier performance by a wider margin.
The latest comparison comes as Trump continues to use the stock market as an indicator of economic strength. However, the relationship between Wall Street and the wider US economy is less direct than the president’s scoreboard suggests.
Reuters reported in July that roughly four in ten US households have no money invested in financial markets, while equity gains are concentrated among wealthier households.
Dow and Nasdaq lag Trump 1.0
The S&P 500 is not the only major index where Trump’s second-term performance trails his first.
The Dow Jones Industrial Average has gained 18.8% during the first 20 months of Trump’s second term, compared with 33.8% over the corresponding period of his first term.
The Nasdaq Composite is up 35.1%, against a 43.5% gain during the same stretch of Trump’s first presidency.
The picture is different for the broader Russell 3000, where the index has performed better during Trump’s second term than it did during the equivalent period of his first.
Compared with other recent presidencies, Trump 2.0’s S&P 500 performance at the 20-month mark has moved ahead of the equivalent period under Joe Biden, while remaining below the level recorded under Barack Obama.
Earnings and AI have powered the rally
The market’s gains have come alongside strong corporate earnings and a surge in spending on artificial intelligence.
Reuters reported in August that the S&P 500 had reached record levels on the back of strong corporate profits, particularly in technology, alongside heavy investment in AI infrastructure. More than three-quarters of S&P 500 companies had reported second-quarter results at the time, with earnings growth running at 31.1% year-on-year. Tech-sector earnings were up 72%.
AI-related investment has also become an important driver of the market. Spending by major technology companies on data centres and related infrastructure has helped support semiconductor and other technology stocks, while stronger earnings have helped bring down the market’s forward valuation from the end of 2025.
But the AI trade is also becoming a source of uncertainty. Investors are becoming more cautious after senior AI executives called for a slower pace of development, raising questions over the sustainability of the spending boom that has helped drive markets.
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Higher yields add another test
US stocks have also had to contend with a sharp rise in Treasury yields.
The benchmark 10-year Treasury yield recently moved above 5%, a level that can make bonds more competitive with equities and increase borrowing costs for households and companies. Reuters reported that, despite the rise in yields, the S&P 500 remained less than 3% below its August record as investors continued to focus on AI-driven profit growth and the resilience of the US economy.
The market has therefore continued to advance despite several sources of pressure, including higher yields, inflation concerns, elevated oil prices and uncertainty over AI spending.
For now, the numbers show a market that has delivered substantial gains under Trump 2.0, even if the pace remains marginally below his first-term run. The next phase of the rally could depend less on the presidential comparison and more on whether corporate earnings and AI investment can continue to offset higher borrowing costs and other market risks.