Understanding Market Movements: From Trump's Election to Recent Drops
- Peter Slavkovsky
- Apr 10
- 2 min read
Since President Donald Trump was re-elected on November 5th, 2024, the stock market has seen significant fluctuations. We want to highlight what to focus on and advise against placing too much importance on news headlines.
Market Conditions Post-Election
Following Trump's re-election, the market saw a significant surge. The Dow Jones Industrial Average (DJIA), Nasdaq Composite, and TSX Composite Index all experienced substantial growth. This period was characterized by optimism surrounding Trump's continued business-friendly policies and economic plans. The DJIA, for instance, rose from around 36,000 points in November 2024 to over 44,000 points by early 2025. The Nasdaq Composite also saw impressive gains, climbing from around 12,000 points to over 14,000 points. Similarly, the TSX Composite Index increased from approximately 21,000 points to over 25,000 points.
Reaching All-Time Highs
The market continued its upward trajectory, reaching all-time highs in early 2025. By February 2025, the DJIA had surpassed 44,500 points, the Nasdaq Composite had climbed to over 14,500 points, and the TSX Composite Index had reached over 25,500 points. This growth was fueled by strong corporate earnings, low interest rates, and continued investor confidence.
Recent Market Drops
In the last few weeks, however, we've seen a significant downturn, mainly due to new tariffs announcements which increased the global concerns about the economy slowdown with geopolitical tensions and increased inflation that all contributed to market volatility. The DJIA has dropped to around 41,000 points, the Nasdaq Composite has fallen below 13,000 points, and the TSX Composite Index has decreased to around 23,000 points
Putting the Drop in Perspective
It's important to understand that the extra run-up from November 5th, 2024, to the all-time highs was, in many ways, an overextension of growth. The market's rapid ascent was driven by factors that may not have been sustainable long-term. As a result, the recent drops are a correction, bringing the market back to more realistic levels.
While the news may portray these drops as alarming, it's crucial to recognize that the market is adjusting from an inflated position. The current downturn is less severe than it might appear when considering the extraordinary growth that preceded it. This correction is a natural part of market cycles and should be viewed as a return to stability rather than a cause for panic.
Conclusion
Understanding the context of market movements helps us make informed decisions. The recent drops are a correction from an overextended growth period, and while they may seem concerning, they are part of the market's natural adjustment process. By keeping this perspective, we can better navigate the current market conditions and make strategic investment choices.
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