How The Stock Market Is Responding To Trump’s Inauguration | Investing.com

When Donald Trump pulled off a surprising victory on November 8, the stock market initially took a hit. However, in the months following the election, the market has bounced back with the Nasdaq seeing returns of 7 percent and the Dow Jones up by 8 percent since Election Day. Just before the election, there was a slight downturn with the Dow Jones falling by 100 points according to CNBC.

Now, as Republicans and Democrats gear up for the next four years of political back-and-forth, investors are starting to pay closer attention to the potential economic impacts of the incoming Trump administration. While it’s premature to predict an impending economic downturn based on this recent slide, it does indicate some nervousness among investors as Trump gets ready to take office.

But it’s important to note that the Trump administration may not necessarily spell bad news for the market long-term. Trump has proposed certain measures that could have positive outcomes for the economy. However, the market slide is a clear signal that investors are cautious about what the future holds, and we can expect some volatility in the short term as Trump and the Republicans begin to govern.

Despite initial expectations that a Clinton victory would be better for the market, the surge following Trump’s win has left analysts surprised. Investors are starting to see potential positives in Trump’s plans, such as his $1 trillion infrastructure proposal to rebuild American infrastructure. Additionally, Trump’s promises to cut regulations and lower taxes are also catching the attention of investors.

But while Trump’s victory certainly played a role in the recent market surge, it’s worth noting that the overall strong performance of the U.S. economy in recent months has also contributed to the market’s success. With rising wages and near full employment, the economy is in good shape, regardless of who occupies the White House.

Looking ahead, as Trump prepares to take office, concerns about economic stability are likely to lead to some short-term market fluctuations. Trump’s unpredictability and some of his more controversial proposals (such as pulling out of international agreements) are causing some unease among investors. It’s essential to keep an eye on how Congress responds to Trump’s initiatives, as they may serve as a check on some of his more extreme policies.

In the coming days, we may see some volatility as Trump takes the reins, but investors should remain cautiously optimistic about the market’s performance in 2017. Rather than reacting to every tweet or statement from Trump, it’s more important to pay attention to the actual policies that are put in place by the government. Ultimately, while there may be some short-term uncertainty, the market is likely to weather the storm and continue on a positive trajectory.