The Volatility Nobody Wants to Talk About Honestly

Trump's second term has produced the most volatile stock market presidency in modern memory, according to the data.

Within the first two months of 2025, the S&P 500 suffered one of the fastest drops to correction territory since World War II. The trigger: tariff uncertainty. Then came 'Liberation Day.' The index nearly closed in bear market territory — a 20% decline threshold — on the back of a single policy announcement.

One press conference wiped out $4 trillion in market value.

The Quick Bounce Back

It recovered fast.

According to CFRA Research chief investment strategist Sam Stovall, the two S&P 500 pullbacks of 5% to 9.9% that occurred in early 2025 reversed faster than the median historical recovery of 34 days. That's a better recovery rate than any president going back to Ronald Reagan in 1981.

The most recent bounce — a recovery from a 9.1% decline in just 16 calendar days — tied for the ninth fastest since World War II, per CFRA.

"The bull market takes the stairs, whereas bear markets take the elevator," Stovall said. "What we're seeing in Trump 2.0 is lower volatility overall combined with a quicker-than-average recovery from sharp sell-offs."

Corporate Earnings Are the Real Story

Behind the tariff drama sits a straightforward fact: corporate earnings are exceptional.

FactSet data shows first-quarter S&P 500 earnings grew more than 20% year-over-year — near the strongest profit expansion since Q4 2021. S&P 500 companies posted Q4 2025 revenue growth of 9.2% and earnings growth of 13.4%, according to U.S. Bank Asset Management Group. First-quarter 2026 results are exceeding analyst expectations of 9.6% revenue growth and 13.0% earnings growth.

"Investors have overcome concerns about geopolitical conflict and trade announcements and focused on fundamental strength, namely corporate earnings growth," said Bill Merz, head of capital markets research at U.S. Bank Asset Management Group.

This isn't a sentiment rally. Businesses are actually making money.

The Iran Ceasefire Effect

Geopolitics played a direct role in the most recent recovery. A U.S.-Iran ceasefire agreement — along with news of a framework to reopen the Strait of Hormuz — pushed the S&P 500 to new record highs, according to U.S. Bank Asset Management Group research dated May 6, 2026.

Lower anticipated energy costs meant lower inflation pressure, which meant investors piled back in. The market responded immediately.

Since Election Day 2024, the S&P 500's total return has climbed more than 25% as of April 20, 2026, per U.S. Bank. That's through a near-bear-market, a global tariff war, and active military conflict in the Middle East.

Broad Market Strength

It's not just large-cap tech doing the heavy lifting. Smaller-company stocks have risen more than 66% from last April's lows, according to U.S. Bank. Broad market participation — not just Nvidia and the AI darlings — suggests this rally has a real foundation.

Terry Sandven, chief equity strategist at U.S. Bank Asset Management Group, put it plainly: "The equity market is still trending higher. That goes back to healthy fundamentals."

Fundstrat's data shows Trump has been the dominant force behind BOTH the five best AND five worst single days for the S&P 500 since he took office in 2025. The market is essentially trading on his next move.

Trump vs. Biden: The Numbers

For context: during Trump's first term, the S&P 500 gained roughly 67% — from 2,271 on January 20, 2017 to approximately 3,798 on January 20, 2021, according to SmartAsset. The Biden years saw cumulative gains of nearly 56%, despite economic reopening and stimulus tailwinds — dragged down by inflation and the Fed's aggressive rate hikes.

Both periods hit record highs. Trump's first term benefited from pre-COVID stability. Biden's term faced structural headwinds from day one.

Neither side wins the whole argument. The economy doesn't care about your bumper sticker.

The 401(k) Lesson

If you panic-sold during the Liberation Day crash, you locked in real losses and missed a 9.1% recovery that happened in 16 days.

U.S. Bank's advice is blunt: rebalancing, diversification, and gradual investing beat headline-chasing every time. The investors who stayed in — despite the tariff chaos, the Iran conflict, and the near-bear-market scare — are up 25% since election night.

The market is not a political scorecard.

Trump's policies created the volatility. Corporate America's earnings absorbed it. Regular investors got whipsawed in the middle. The lesson isn't to praise Trump or blame him — it's to understand that whoever is in the Oval Office, your retirement account shouldn't depend on their next tweet.