The US has been experiencing a long “bull” stock market, that is rapid growth in stock prices, although this week tech stocks tumbled over the future prospects for US-built AI.
But could the market hit a significant downturn during Trump’s second term in the White House? At first sight this seems unlikely because it did well during his first term, from 2016 to 2020 (see chart below). However, long term trends in the US stock market reveal a pattern suggesting that stock prices might be quite vulnerable during his second term.
The Nobel prize-winning economist, Robert Shiller, who studies financial markets thinks that the US stock market has peaked, and future returns will be much more modest than in recent history although he does not suggest that a crash is on the horizon.
