U.S. Market Update: Four Months After The Presidential Election

2025-03-28 16:17:00 ET

Summary

• Three pivotal events mark shifts in market sentiment over the four months since November 2024 - the US election outcome, the Fed’s December policy meeting and the February 2025 release of a key US consumer sentiment survey.
• Macro, equity and fixed income data reflect market optimism immediately post-election despite a jump in inflation expectations, followed by a worsening of the inflation outlook and, more recently, economic pessimism with declining consumer sentiment, painting a starkly different picture four months since the election.
• After the immediate post-election jump, inflation expectations were stable until close to the end of the year.

By Mark Barnes, PhD, & Indhu Raghavan, CFA

With the pace of new policy proposals offered during the initial months of the Trump Administration, the investing world has been focused on the US and markets have responded to policy changes in a variety of ways. In this insight, we use data four-months post-election to analyse important market changes over the period. We find that there were three pivotal events that divide the four months into three different periods with different sentiment, based on macro data and FTSE Russell equity and fixed income index data....

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