Global Stocks Trounce the S&P 500 in Trump’s Chaotic First Year

(Bloomberg) — After the S&P 500 Index rebounded from the brink of a bear market in April and spent the remainder of the year going from one record to the next, President Donald Trump billed it as a sign that he had transformed the US — as he likes to put it — into the world’s “hottest” country.

Measured against stock markets from Tokyo to Frankfurt to financial capitals across the developing world, though, the verdict on Trump’s return to the White House is decidedly less triumphal.

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In fact, equities worldwide — once the US is excluded — have risen around 30% since he took office a year ago, roughly double the S&P 500’s gain, according to MSCI’s index. The US hasn’t lagged that much during a president’s first year since 1993, when the nation was recovering from a recession and investors were flocking to growing markets overseas.

Trump’s comparison with his predecessors is no better: As far as the S&P 500 goes, the first-year gain under Trump clocks in as only the ninth best start to a term since World War II, according to CFRA. Ronald Reagan, George H.W. Bush, Bill Clinton, Barack Obama, Joe Biden — and even Trump during his first stint — all saw bigger gains.

US presidents, of course, don’t determine the direction of the stock market, as much as they take the blame or credit. But in Trump’s case, his trade war, foreign-policy surprises like pushing for a US takeover of Greenland, moves to exert greater control over key industries, and threat to the Federal Reserve’s independence have all periodically unnerved investors. That, in turn, has effectively tapped the brakes on a rally driven largely by the artificial-intelligence boom and the surprisingly resilient economy he inherited.

“You have a guy that’s guaranteed to give you choppiness at the top,” said Rhys Williams, chief strategist at Wayve Capital Management LLC.

“If you ignore the noise and focus on the price, the economy is doing OK,” he said. “There’s enough going on with this big secular tailwind in AI that really should keep everything, at least GDP, moving in the right direction.”

The outcome stands at odds with what investors anticipated in late 2024, when the expectation of Trump’s victory fueled speculation that his tax-cuts and deregulation agenda would fan an already strong economy.

Instead, the early months of his presidency were a source of volatility as he charged billionaire Elon Musk with slashing federal spending and broke sharply from policies of his predecessor. His April tariffs sent markets into a tailspin until he started dialing them back. He has also sought to exert broad powers over segments of the economy — by laying claim to Venezuela’s oil, trying to order banks to cap credit-card rates, lashing out and defense contractors and directing the federal government to take stakes in companies like Intel Corp., among other things.

“The winners and the losers changed fairly rapidly,” said Rob Haworth, senior investment strategy director at US Bank Asset Management, which oversees over $540 billion in assets. “It was tough for investors to be nimble.”

The US stock market has largely powered past the uncertainty, thanks in part to the large gains seen by the tech-industry giants that are positioning themselves to dominate the AI business and the Fed’s interest-rate cuts.

But as the dollar tumbled during the first half of the year, the job market cooled, and Trump pushed European allies to spend more on their own defense, stock markets around the world — in Asia, Europe, and Latin America — pulled ahead of the US. MSCI’s emerging-market index rose over 30% last year, it’s biggest advance since 2017.

Craig Basinger, chief strategist at Purpose Investments Inc., who was an early bull on global stock markets, said the view that equities elsewhere will keep outpacing the US is no longer a contrarian view.

“Money chases performance,” he said.

The US stock market’s run wasn’t a bad one, by any means. The S&P’s advance marked its third straight annual double-digit gain, and Wall Street forecasters headed into 2026 predicting another up year. The benchmark fell 1.4% at Tuesday’s open in New York as the standoff between the US and Europe over control of Greenland showed no sign of de-escalation, while heavy selling in Japanese debt rippled through global bond markets.

Moreover, there remain plenty of bulls, given the US’s standing as the world’s largest economy and the strong profits produced by its major companies. Occasional fears that Trump’s go-it-alone stance and challenge to the global order would cause an exodus from US markets have so far not been borne out.

“Ultimately for long-term investors who are looking for exposure to the best growth opportunities from the fastest growing markets, the US is still number one on the pecking order,” Jamie Murray, portfolio manager at Murray Wealth Group in Toronto.

Yet beneath the surface, it has been a fairly volatile run since Trump returned to the Oval Office: The 100 largest members of the S&P 500 saw 47 instances of sharp drops of five standard deviations or more in 2025, which is the most going back as far as 1998, according to data from Barclays.

This year, the run-up to the mid-term Congressional elections are also a factor. Such years are usually weaker ones for the stock market, in part due to risk that the president’s agenda will be derailed by a victory by the opposition.

Facing low approval ratings and voter frustration with elevated inflation and interest rates, Trump has responded in recent weeks by seeking target mortgage and credit card rates, as well as the electricity costs attributed to the surge of AI-related data centers. That’s left investors bracing for more volatility as he targets other segments of the economy.

On top of that, Trump has exerted unprecedented pressure on the Fed to lower interest rates, with his administration going so far as to launch a criminal investigation of Chair Jerome Powell, in a move that’s fanned investors’ worries about the bank’s continued independence. Trump will also nominate a replacement for Powell, whose term as chair ends in May.

“Midterm years have been the worst years on the calendar historically,” said Mark Hackett, chief strategist at Nationwide Funds Group. “In general the midterm elections tend to be very contentious, which I’m sure this one will be, and that causes people to not feel very good.”

Or, as he summed it up: “The market doesn’t like uncertainty.”

–With assistance from Stephanie Hughes and Miles J. Herszenhorn.

(Updates index move in the 15th paragraph)

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