In the one year since the 2024 US presidential election, many of the initial market reactions have reversed, reinforcing the notion that market dynamics, not politics and policy, often have the most impact on investment performance.
In a new study, Morningstar Indexes Strategist Dan Lefkovitz examines which “Trump trades” have persisted and which have reversed, since the post-presidential election pop and during the wild ride of the past year:
- US large-cap stocks have performed well in the past year, but so have non-US stocks, defying post-election investor perception of a widening gap between the US and international markets. In fact, the Morningstar Global Markets ex-US Index has outperformed the Morningstar US Market Index by more than 11 percentage points in 2025.
- US small-cap stocks, after a post-election pop on expectations of a small business-friendly US policy, have come back down to earth, as the market has been dominated by a narrow group of large-cap technology stocks. In fact, the Morningstar US Small Cap Extended Index has risen just over nine percentage points in 2025, well behind its large-cap equivalent.
- US Treasury bonds and the US dollar have also reversed course since the aftermath of the 2024 US presidential election. After Treasury yields climbed following the election on concerns around rising inflation and interest rates, and spiked on global trade war fears, the US bond market has settled down and the Morningstar US Core Bond Index has actually risen nearly 7% this year. And the US dollar, after rising following the election on expectations of growth and inflation, had its worst first half of the year in 2025 in more than 50 years due to fears over tariffs and debt.
Dan Lefkovitz – Strategist, Morningstar Indexes
“The past several US presidential administrations have produced a string of counterintuitive investment results, from the poor equity market returns under business-friendly Bush to the success of oil and gas stocks under Biden. Given this history, it’s not surprising to see many of the initial ‘Trump trades’ fizzle. History has shown that the investment impact of politics is often overstated.”
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