A – perhaps the – chief source of comfort to the pro-tariff crowd has been the performance of the stock market. But it’s unclear just how comforting this performance should be.
Take the following for what it’s worth, but I just calculated that on October 20th, 2017, (the same number of days into Trump 1.0 after his election as we are now into Trump 2.0 after his re-election), the Dow Jones Industrial Average closed 27.3% higher than its close on election day 2016, and 18.2% higher than its close on January 19th, 2017.
By comparison, today (October 17th, 2025) the DJIA closed 9.4% higher than its close on election day 2024, and 6.2% higher than its close on January 19th, 2025.
That is, the DJIA grew much more impressively during the same time period of Trump 1.0 than during Trump 2.0. This fact is especially telling given that there was nothing during the relevant time period of Trump 1.0 (early November 2016 through mid-October 2017) that was equivalent to the progress of AI and its happy effect on capital values.
The above calculations are simple; they control for nothing. But nor do the pro-tariff people control for anything when they point triumphantly to the stock market and shout “See! Tariffs work!” The raw data on the stock market – or, at least on the DJIA – are nowhere nearly as supportive of the tariffs as Trump & Co. would have us believe.
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The above post is a follow-up to this one that I did this past August 8th.
