How a Trump-led White House could impact stock market in 2025

Jeffery Hirsch, Editor in Chief of Stock Trader’s Almanac, explains how Donald Trump's win could impact the market in 2025.

Transcript

00:00So you brought up the election. We saw a huge rally in the stock market the day after the results.

00:07Can you tell me what does history suggest could happen for the stock market over the next four

00:16years, given that we have, at least for now, a Republican White House, a Republican Senate,

00:22a Republican House? Lots to unpack there. Well, the reason the market popped so much

00:27right after the election was that the decision was quick and decisive, which we were all fearing

00:31that there was going to be some, you know, drawn out process like we've had, like we had in 2020

00:38and in 08, in 2000, I mean in 2000. So what history suggests is that we've got a Republican

00:46Congress, which is more important than the presidency, believe it or not. In the 25-moment

00:51accolades, all the political alignments, the best combination is Republican, excuse me, Democratic

00:55President, Republican Congress. Dow averages over 17%, but Republican Congresses alone, 13%

01:02Dow and S&P and like 15.6% with a Republican Congress for the Nasdaq. So that's just for the

01:08post-election year, okay? I mean, that's for all years. The post-election year itself, I mentioned

01:13earlier, 8% to 12%, and I'm concerned with that midterm year, which is where we see bear markets,

01:20recessions, and market declines in general happening. I'm looking for, you know, new highs.

01:27I think we can get upwards of, you know, down 60,000 by the end of the next four years.

01:35So, I mean, we hear sometimes that the market likes gridlock. Is that true historically?

01:42I think that's wrong. It's not gridlock per se. The combination of a conservative,

01:49fiscally conservative body controlling the purse strings in Congress and a progressive, more, you

01:54know, nuanced thinking in a Democratic President seems to be the best combination, or has been the

02:00best combination. We're still a little gridlock in the House. They don't have much of a margin there.

02:04I think the conservative wing there is going to keep things in check. So it's really Republican

02:09Congresses that are most important for the bull market. Now talk to me about Trump's policies.

02:14He is very verbal, very vocal about tariffs, right? So what are the likely impacts

02:23on the stock market from a tariff plan? I mean, if he goes all out with everything,

02:29it would be expensive. I don't foresee him doing that. It's a negotiation tactic. He's

02:34the art of the deal guy. He wants to get people to the table. Some tariffs have been effective

02:40historically. I think Mr. Trump has a legacy that he wants to keep up. He doesn't have to

02:50run for re-election. I think he's going to do everything in his power to preside over economic

02:54growth, a bull market, and global stability. And if he just goes willy-nilly and puts tariffs on

03:00everybody out there, it's not going to achieve that. So it's going to be tactical.