Will the Stock Market Crash in Year 2 of Donald Trump's Second Term? Several Historically Correlated Events Offer a Clear Answer.

From a statistical standpoint, the banal marketplace has thrived with Donald Trump successful the Oval Office. During his archetypal word (Jan. 20, 2017 – Jan. 20, 2021), the wide followed Dow Jones Industrial Average (DJINDICES: ^DJI), broad-based S&P 500 (SNPINDEX: ^GSPC), and innovation-inspired Nasdaq Composite (NASDAQINDEX: ^IXIC) gained 57%, 70%, and 142%, respectively.

Since Donald Trump was inaugurated for his second, non-consecutive word connected Jan. 20, 2025, it's been much of the same. Through the closing doorbell connected Feb. 11, the Dow, S&P 500, and Nasdaq Composite person respectively risen by 15%, 16%, and 18%.

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Although banal marketplace volatility has been disconnected the charts astatine times with Trump successful the White House, his policies, including the imperishable lowering of the highest marginal firm income taxation complaint from 35% to 21%, person lit a occurrence nether Wall Street and driven grounds stock buybacks.

But erstwhile things look excessively cleanable connected Wall Street, they often are. Rumblings of a imaginable banal marketplace clang successful twelvemonth 2 of President Trump's 2nd word are mounting. Thankfully, respective historically correlated events connection wide penetration into the likelihood of a banal marketplace clang taking shape.

Before going immoderate further, it's important to enactment that past can't warrant that thing is going to hap connected Wall Street. Although past does thin to rhyme connected Wall Street, and definite correlated events person flawless way records of foreshadowing the future, thing should beryllium taken arsenic a factual guarantee.

Nevertheless, the pursuing 3 data-backed correlations supply a historical glimpse of what to expect successful twelvemonth 2 of Donald Trump's presidency.

The archetypal humanities marker deserving of attraction is the time-tested Shiller Price-to-Earnings (P/E) Ratio, which is besides known arsenic the Cyclically Adjusted P/E Ratio, oregon CAPE Ratio. The S&P 500's Shiller P/E is based connected mean inflation-adjusted net implicit the erstwhile 10 years and has been back-tested to January 1871.

This valuation yardstick is peculiarly utile successful determining the comparative cheapness oregon priciness of Wall Street's benchmark index, the S&P 500. Whereas the Shiller P/E has averaged 17.34 implicit the past 155 years, it ended the Feb. 11 trading league astatine 40.35. This is the second-priciest banal marketplace successful history, trailing lone the dot-com era.