For better or worse, investors are living for the Trump stock market. Here is the reason

President Donald Trump has been considered the last president of the stock market, overseeing multiple record expansions while serving as the catalyst for a major decline.

In the first two months of Trump’s second term, i S&P 500 he experienced the fastest decline in the economy since World War II, fueled primarily by uncertainty about his tax policies. Less than a month later, the index nearly closed in a bear market on the heels of the president’s “independence day” tax announcement. A correction is defined as a fall of at least 10% but less than 20% from its most recent high, while a bear market is a decline of at least 20% or more at the close.

But the market has recovered faster than usual under Trump.

When it comes to the S&P 500’s 5% to 9.9% pullback from its peak, the two that have occurred since early 2025 have pulled back faster than the 34-day median, according to CFRA Research. That’s a better recovery rate than any other president since Ronald Reagan in 1981.

“A bull market takes a ladder, and a bear market takes a ladder,” said Sam Stovall, chief investment strategist at CFRA Research. “What we’re seeing in Trump 2.0 is low volatility combined with a faster-than-average recovery in sharp sales.”

The most recent recovery in Trump’s second term — in which the S&P 500 bounced back from a 9.1% decline in just 16 calendar days — was one of the fastest since World War II, ranking ninth fastest, CFRA found.

“Income growth has kept investors optimistic,” said Stovall.

FactSet data shows that the S&P 500’s first-quarter gains grew more than 20% year-over-year. That’s close to the strongest earnings expansion since the fourth quarter of 2021.

That strong profit — which has underpinned strong interest in artificial intelligence on the Street — is likely to support the market’s recent gains. But this rise started because of the hope that the war between the US and Iran will reach an end in the short term.

Iran and the US last month agreed to a ceasefire, easing concerns that oil prices will remain high and put upward pressure on prices. However, that deal has become increasingly fragile, with Trump this week saying the ceasefire is “based on life.”

“The news charts play a big role,” said Carson Group Chief Market Strategist Ryan Detrick. “We’ve been in a headline-driven world, a headline-driven market, and investors have had to buckle down and ride the roller coaster with it.”

Detrick insists that the global bull market for equities is still here, and may be on the short side for its lifetime. From here, he thinks, investors would be better off buying the dip.

“I don’t know that we have ever had a market prepared like this for the daily news coming out of the White House,” he said. “Under President Trump going forward, I think this dynamic is what we have to get used to.”

That speaks to a generational shift in play on Wall Street. In recent years, investors have been positioned to use the downturn in capital markets as buying opportunities, especially those who have aged due to the global financial crisis.

“FOMO is a real thing for the institutional investor,” said Steve Sosnick, Chief Strategist at Interactive Brokers.

Sosnick found that those who sold on Trump’s tariff announcement last year and delayed buying stocks outperformed those who did not. That has now led to “this general reluctance of institutions, so to speak, to sell more,” he said.

“It’s possible that we’re putting too much behind us, or a little more faith when we get a pep talk from the administration,” the strategist told CNBC.

Investors are so focused on announcements from the White House that Trump has been the main driver of the market’s best — and worst — five days since he returned to office, Fundstrat data shows.

The S&P 500’s best day since Trump’s re-election was April 9, 2025 — when it rose more than 9% after pausing his widespread tax cuts. The bench’s worst day comes on April 4, 2025, after China retaliates with its own levies on American goods.

In nearly half a century no US president was responsible for these best and worst market days while in office, according to Fundstrat. If it weren’t for Trump’s five-day run during his second term, the S&P 500 would be up 1% since he took office. That contrasts with the index rising 23.5% since that opening day.

“No other president has had this level of wealth control over the stock market,” Hardika Singh, chief economic strategist at Fundstrat Global Advisors, said in an interview.

“The strategy that investors should follow is that you don’t fight with the White House, because you will lose and you won’t make any money,” he said. “Throw away your old investment playbook.”

Trump’s style of communication, sometimes quick posts on social media, has added fuel to the market – and changed how future presidents will have to convey messages to Wall Street, said Matt Gertken, chief geopolitical strategist at BCA Research.

“Social media is like the name of the game now,” Gertken said. “Even a president who comes in and tries to use a strong and normal communication style may end up adopting some of Trump’s values ​​over time because of the situation he finds himself in.”

Even if future presidents adopt a Trumpian style of communication, the market will remain volatile. For Gertken, if future presidents are more silent on social media, the market will be “volatile and loose without speculation.” But if they talk as often as Trump, the market will fluctuate based on their latest statements.

“There is no turning back,” he said.