President Donald Trump inherited a robust stock market when he began his second term in January 2025, and then watched the markets tumble when he unveiled his sweeping tariff program. By the end of the year, however, the major stock exchanges were hovering near all-time highs — partly because the tariff threats were later walked back considerably.
What potential stock market changes can we expect in the second year of Trump’s second term? Here’s a look at three key areas that could have a major impact on the stock market.
Trump has made no secret of his desire to have the Federal Reserve keep lowering interest rates, and he has often been critical of Fed Chairman Jerome Powell for not moving aggressively enough.
Now the battle between the Trump administration and the central bank has been amped up following the news that Justice Department prosecutors have opened a criminal investigation into Powell.
The investigation centers on Powell’s 2025 congressional testimony regarding the Fed’s $2.5 billion renovation of its headquarters, CNN reported. However, some observers see the investigation as a way to replace Powell with another Fed chair who’ll lower rates to Trump’s liking.
The U.S. stock markets initially sank on the news, Reuters reported. But they later recovered — partly because nobody is sure how the Powell investigation will ultimately play out.
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The Trump administration has openly stated that it aims to exert more control on this side of the world. To that end, the White House recently ordered the U.S. military to invade Venezuela, capture Nicolás Maduro and bring him back to the United States to face drug trafficking charges.
But those charges were quickly overshadowed when Trump said the U.S. plans to take control of Venezuela’s vast oil reserves. Those plans include structured sales of barrels previously blockaded, according to StockCharts.
As StockCharts noted, Trump “publicly urged” major U.S. oil suppliers, such as Chevron, ExxonMobil and ConocoPhillips, to invest up to $100 billion of their own capital to rebuild Venezuela’s oil infrastructure.
Normally when this kind of event happens, it rattles the stock markets. But that wasn’t the case following the Venezuela invasion. Instead, the markets rose to new highs, led by gains in the oil/energy, defense and artificial intelligence sectors.
But the excitement over Venezuela’s oil might be premature. While it has the largest oil reserves in the world, the country currently produces less than 1% of global supply, according to Scott Galloway, an entrepreneur, author and NYU business professor.
