Major U.S. stock indexes delivered significant gains during President Donald Trump's first term and continued this performance into the initial year of his second term. The S&P 500 closed 2025 up 16% despite early-year volatility following the announcement of new tariff and trade policies.
From January 20, 2017, to January 20, 2021, the Dow Jones Industrial Average rose 57%, the S&P 500 increased 70%, and the Nasdaq Composite surged 142%.
While artificial intelligence development has been a primary market catalyst, with Nvidia's graphics processing units powering AI data centers, another factor has emerged. President Trump's tax policy appears to have sparked a trillion-dollar annual investment trend on Wall Street.
The president's policies have had mixed effects on corporate America. His tariff and trade policy, announced in early April 2025, briefly roiled markets with proposals for a 10% global tariff rate and higher "reciprocal tariffs" on countries with adverse trade imbalances. A December 2024 report from New York Federal Reserve economists found that companies impacted by Trump's China tariffs from 2018-2019 saw employment, productivity, sales, and profits decline from 2019 to 2021.
However, the Tax Cuts and Jobs Act passed in 2017 has had a positive impact. The legislation permanently reduced the peak marginal corporate income tax rate from 35% to 21%, its lowest level since 1939.
Data from S&P Dow Jones Indices shows this tax change has fueled unprecedented stock buyback activity. S&P 500 companies repurchased $249 billion worth of their own stock in the third quarter of 2025, following a record $293.5 billion in the first quarter. This puts the index on pace for approximately $1.02 trillion in share repurchases for the full year.
Before the tax law took effect, quarterly buyback activity typically ranged between $100 billion and $150 billion. Since its passage, excluding early pandemic uncertainty, quarterly repurchases have surged to between $200 billion and $250 billion.
Apple has been the most active, buying back over $816 billion worth of stock since 2013 and reducing outstanding shares by about 44%. The company spent $90.7 billion on buybacks in fiscal 2025.
Alphabet ranks second among S&P 500 companies, having repurchased $342.4 billion worth of shares over the trailing decade through September 30, 2025. Nvidia has bought back $115.1 billion over the last ten years, with its trailing twelve-month total approaching $52 billion.
With no imminent changes to corporate tax policy expected, companies continue to use buybacks to potentially boost earnings per share and reward shareholders.