Trump 1.0 Vs. 2.0: Back On Track?

The S&P 500 has fully recovered its initial 16.9% decline experienced in the 55 trading days post-Inauguration Day, now showing a 5% gain since President Trump's re-election. Despite this domestic recovery and new highs, the US stock market remains among the worst performers globally and specifically within the G7 group since the inauguration, indicating relative underperformance despite recent domestic gains.

Analysis

The S&P 500 has demonstrated a significant V-shaped recovery following a notable period of weakness post-Inauguration Day. After an initial decline of 16.9% over 55 trading days, the index has not only recouped all losses but has advanced to a 5% gain for the period since January 20th. This impressive absolute performance, however, is contrasted by a significant relative underperformance on the global stage. According to the data, the U.S. stock market ranks near the bottom among international peers and is the worst-performing market among G7 country ETFs since the inauguration. A recent shift may be underway, as U.S. performance has improved to fourth-best within the G7 since April 2nd, but the broader trend highlights that a U.S.-centric portfolio would have lagged a more globally diversified one over the specified period.

Key Decisions for Investors

• Given the stark contrast between strong absolute U.S. market momentum and its relative underperformance globally, investors should reassess their geographic allocations to ensure they are not overly exposed to a lagging region.
• The data suggests that opportunities for superior returns may exist in non-U.S. equities, particularly within the G7, which have outperformed the S&P 500 since the inauguration.
• Monitor whether the improved U.S. market performance since early April marks a sustainable reversal or a temporary bounce, as this will be a key signal for tactical adjustments between domestic and international equity exposure.