Wall Street soared under Trump, but it's been a rocky ride

NEW YORK (AP) — The last four years have been good for stocks, with the S&P 500 climbing more than 50% and many 401(k) balances looking healthier, as President Donald Trump likes to point out so often.

But a look at the market’s winners and losers since Trump’s surprise win in 2016 also shows how hazardous it can be to set your investments based on election results.

The stocks that Wall Street initially thought would benefit most from a Trump administration have since fallen back, sometimes sharply. And stocks that were afterthoughts have become market leaders.

Trump’s stunning victory on Nov. 8, 2016, soon gave way to a consensus that his pro-business policies would be a boon for stocks. Stocks of smaller companies and bank stocks got an extra boost, part of what was coined the “Trump trade,” tied to expectations for Washington to deliver lower tax rates and lighter regulation for businesses. Meanwhile, tech stocks lagged the market at first.

Things eventually switched around, the result of several huge shifts in the market’s momentum, including worries about Trump’s punishing trade war with China, despair about the coronavirus-caused recession and relief that the Federal Reserve once again came to the market’s rescue.

ROLE REVERSALS

The technology sector has been the big winner under Trump, but tech stocks initially lagged behind the S&P 500 after the election. Investors worried that an “America First” White House would threaten the big revenue tech companies get from China and other countries overseas. And the thinking was tech companies stood to benefit less from a U.S. tax cut because of their extensive international operations.

Tech stocks eventually regained their momentum from the Obama years, thanks to consumers’ desire for smartphones and ongoing trends such as cloud...