From a statistical standpoint, Wall Street has enjoyed having Donald Trump in the White House. The iconic Dow Jones Industrial Average (^DJI +0.58%), widely followed S&P 500 (^GSPC +0.37%), and growth stock-dominated Nasdaq Composite (^IXIC +0.19%) soared 57%, 70%, and 142%, respectively, during Trump's first term; and they've rallied by 14%, 23%, and 32%, as of May 19, 2026, since his second, non...
From a statistical standpoint, Wall Street has enjoyed having Donald Trump in the White House. The iconic Dow Jones Industrial Average (^DJI +0.58%), widely followed S&P 500 (^GSPC +0.37%), and growth stock-dominated Nasdaq Composite (^IXIC +0.19%) soared 57%, 70%, and 142%, respectively, during Trump's first term; and they've rallied by 14%, 23%, and 32%, as of May 19, 2026, since his second, non-consecutive term began. However, not all of President Trump's actions lead to tailwinds for the stock market. For instance, his tariff and trade policy, introduced in early April 2025 and invalidated by the U.S. Supreme Court in February 2026, ignited historic elevator-down moves for the Dow, S&P 500, and Nasdaq Composite over the course of a week. Another bout of historic downside volatility may be brewing. While Trump seemingly couldn't wait to show now-former Fed Chair Jerome Powell to the door (Powell remains on the Board of Governors), he's left his handpicked successor, Kevin Warsh, in a virtual no-win scenario -- and it's the stock market that'll likely end up paying the price. Kevin Warsh wants to reshape the central bank Based on Warsh's testimony before the Senate Banking Committee, he has big plans for America's foremost financial institution. Arguably, the biggest change the new Fed chair wants to make is to the central bank's bloated balance sheet. He's been a harsh critic of the Fed's expanding assets since stepping down from the Board of Governors on March 31, 2011. Between August 2008 and March 2022, the total assets held by Federal Reserve banks (primarily U.S. Treasury bonds and mortgage-backed securities) jumped roughly tenfold to nearly $9 trillion. As of May 13, 2026, the Fed had over $6.7 trillion in assets on its balance sheet. Warsh has made it clear that he wants the central bank to stop being an active market participant when it's not necessary. This would entail selling a majority of the Fed's balance sheet assets. Powell's successor also spoke o...