From Morningstar: 2025-05-02 05:31:00

President Donald Trump’s second term has seen a sharp slowdown in GDP growth, sending stocks tumbling and raising questions about the safety of US investments. Trump’s first 100 days saw stocks fall nearly 8%, with investors gravitating towards defensive postures. Reciprocal tariffs announced in April sent markets into a tailspin, reminiscent of the 2020 pandemic collapse.

US stocks neared a bear market, down nearly 20% from their recent high, as Trump’s tariffs against Mexico and Canada took effect. Initially optimistic after Trump’s election, investors grew concerned about the impact of tariff threats. Trump’s reversal on many levies provided some relief, with the market rallying as investors hoped for further retreat on aggressive tariffs.

Volatility reigned in the markets as swings in the US Market Index reached levels not seen in years. Significant gains followed losses as stocks reacted to tariff news and Federal Reserve concerns. The stock market saw major swings, with sessions of 2% or more gains more frequent than in 2024.

US bond market yields jumped post-tariff announcement, driven by concerns about policy uncertainty and tariffs’ impact on the economy. Inflation forecasts were raised, and global investors grew less confident in the US financial system, demanding higher premiums on government debt.

Gold prices soared as investors sought safety amid market turmoil, hitting record highs in April. Cryptocurrency prices, particularly bitcoin, fell during Trump’s first 100 days but regained ground after the tariff pause. International markets outperformed the US, as investors rotated out of the US market and within it.

Diversified portfolios proved better at weathering the storm, as fixed-income markets insulated investors against stock market losses. The Morningstar US Moderate Target Allocation Index, designed as a benchmark for a 60/40 portfolio, lost 2.1% compared to 8% losses for the total US stock market index during Trump’s first 100 days.



Read more at Morningstar: Trump’s First 100 Days in 9 Charts