The S&P 500 is on the verge of relinquishing all gains achieved since Donald Trump’s 2024 re-election. As of Monday’s market close, the index reflected a meager 0.92% increase since November 5th, the day Trump secured his second term, triggering a brief market surge. While S&P 500 futures hinted at a potential rebound early Tuesday with a 0.27% rise, the index has already dipped 0.77% in January.
Should this downward trend persist through next Monday’s inauguration, the S&P 500 could experience its worst performance between Election Day and a presidential inauguration since Barack Obama’s first term in 2009, amidst the Great Recession. This analysis is based on data from Bespoke Investment Group, as reported by CNBC.
The Dow Jones Industrial Average has also witnessed a significant reduction in its post-election gains, now standing only 0.18% higher than its November 5th level. Year-to-date, the Dow has fallen 0.85%. The Nasdaq, heavily influenced by technology stocks, maintains a 3.52% gain since Election Day, though its returns have also moderated.
Monday’s decline in tech giants like Nvidia (NVDA) and Super Micro Computer (SMCI), triggered by the Biden administration’s new regulations on AI chip sales, contributed to the Nasdaq and S&P 500’s losses. The Nasdaq has slumped 1.63% in 2025. Dow futures showed a positive sign in pre-market trading Tuesday, rising 115 points, while Nasdaq futures edged up 0.33%.
Following the election, major U.S. indexes initially reached record highs in a Trump-driven rally. The Dow surpassed 44,000 for the first time in its history, and the S&P 500 breached the 6,000 mark.
Investors are now anticipating the commencement of fourth-quarter earnings reports, starting Wednesday with major banking institutions JPMorgan Chase (JPM), Citibank (C), and Wells Fargo (WFC). The December Consumer Price Index (CPI), a crucial inflation indicator, is also scheduled for release Wednesday morning. These economic indicators will heavily influence trading as Wall Street anticipates fewer interest rate cuts in 2025. The market’s response to these upcoming reports will be closely watched as a barometer for the economic outlook in the coming year. As uncertainty lingers, investors are seeking clarity on the direction of both the economy and the market.
