Is the Stock Market Going to Crash Under President-Elect Donald Trump? Here’s What History Has to Say.

President-elect Donald Trump is set to inherit one of the most expensive stock markets in history, with the S&P 500’s Shiller price-to-earnings ratio at its third-highest level in 153 years. This elevated valuation, combined with policy uncertainties such as proposed tariffs and tax cuts, raises concerns about the possibility of a short-term market correction or crash. Historical data shows that overvalued markets have previously led to sharp declines, as seen during the dot-com bubble and the 2022 bear market.
However, history also suggests that bear markets are typically short-lived, averaging about 9.5 months, while bull markets last much longer. Additionally, unified Republican control of the government has historically delivered strong average annual returns for the stock market. While a correction may occur, patient investors could find opportunities for long-term growth.