Investors saw the S&P 500 deliver an impressive 81.3% total return during Donald Trump’s first term from 2017 to 2021, according to a U.S. Bank analysis. That ranked it fourth among all four-year presidential terms since 1980. Sure, there were bumpy moments — trade wars caused short dips, and the 2020 pandemic crash wiped out months of gains in a matter of weeks. But the index still climbed higher overall because corporate tax cuts, deregulation, and fiscal stimulus gave earnings and buybacks a real boost.
Now, with Trump’s second term underway and similar pro-growth policies rolling out through the One Big Beautiful Bill Act, history suggests there could be more upside if the economy delivers. Let’s walk through the patterns that drove those first-term gains and spotlight two stocks that look well-positioned to benefit again — perfect for everyday retail investors like us who want to stay focused on the long game.
First-Term Gains Showed Markets Looked Past the Noise
From inauguration day to the end of Trump’s first term, the S&P 500 rose 67.82% on a price basis. It gained 9.27% in the first six months, 24.15% after one year, and 46.52% after three years. Trade tensions with China triggered some scary 10 % to 15% corrections along the way, but the market recovered every single time as company earnings kept growing.
The big catalyst was the 2017 Tax Cuts and Jobs Act, which slashed the corporate tax rate from 35% to 21%. That put more money in companies’ pockets, fueling everything from higher profits to bigger share buybacks. Markets rewarded results over the daily headlines, and we’re already seeing echoes of that resilience. The S&P 500 posted a strong 17.9% total return in 2025 despite tariff talk, and it’s only down less than 1% year-to-date through early April 2026.
Tax Cuts and Deregulation Delivered Key Wins
Certain sectors clearly thrived under those policies. Take technology giant Apple (NASDAQ:AAPL | AAPL Price Prediction). In fiscal 2019, it reported $55.3 billion in net income on $260.2 billion of revenue. The stock soared 86.2% that year — far ahead of the S&P 500’s 31% gain. Lower taxes helped Apple ramp up buybacks and R&D spending while still generating a hefty $58.9 billion in free cash flow.
Overall, during Trump’s first term, Apple was one of the best-performing Magnificent 7 stocks, generating a total return of 402%. It’s a great reminder that strong balance sheets and real growth can carry a stock through noisy times.
On the industrial side, Caterpillar (NYSE:CAT) benefited from easier permitting and infrastructure support. The company posted $54.7 billion in revenue in 2019, and its stock returned 16.4% that year as domestic manufacturing and construction picked up steam. It had a total return of over 154% between Trump’s election in 2016 and when Joe Biden assumed the presidency in January 2021.
While 2020’s pandemic volatility hurt both stocks, the earlier policy tailwinds helped set up solid rebounds once things stabilized.
So far in the second term, Caterpillar has been on fire again — more than doubling in value — while Apple is up a respectable 16.6%. These examples show how focusing on earnings and fundamentals, rather than getting distracted by headlines, has helped patient investors come out ahead.
Key Takeaway
History makes it pretty clear: Trump’s combination of tax relief and deregulation has a track record of lifting corporate profits enough to overcome short-term policy friction. As regular investors, we don’t need to predict every twist in Washington — we just need to own quality companies that can keep compounding.
Smart positioning means holding some exposure to beneficiaries like Apple and Caterpillar, keeping a little cash on the sidelines for attractive dips, and staying diversified. Risks like extended tariffs or inflation are real, of course, but the data from 2017-2021 and the solid 2025 performance show that growth execution has repeatedly turned uncertainty into gains.
When all is said and done, the numbers still favor staying invested over sitting on the sidelines. Keep your eyes on the businesses, not just the noise, and let time do its work.
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