From January 2017 to December 2019, U.S. equities experienced one of the most remarkable periods in recent history. Driven by corporate tax reform, pro-business policies, and a favorable economic climate marked by low inflation and supportive monetary conditions, the “Trump bull market” produced significant gains across large, mid, and small-cap stocks.

Despite ongoing volatility reminding investors of cyclical risks, the overall period yielded impressive returns across every major benchmark. This article aims to offer insights for investors, hoping for a repeat of the dynamics seen from 2017 to 2019.

Three-Year Total Returns by Major Index (Jan 2017 – Dec 2019)

• S&P 500 (large-cap): +53%
• Dow Jones Industrial Average: +49%
• Nasdaq Composite: +80% (top performer)
• Russell 2000 (small-cap): +27%
• S&P MidCap 400: +27%
• S&P SmallCap 600: +27%

Other Notable Overperformers

• Russell 1000 Growth: +70% – Benefited from strong large-cap growth, especially in tech and consumer discretionary sectors.
• Russell MidCap Growth: +54% – Outperformed both the S&P MidCap 400 and Russell 2000, highlighting the strength of mid-cap growth stories during this bull market.

Key takeaway: While broad indexes saw solid gains, growth-focused benchmarks—especially those leaning toward technology and innovative companies—outperformed value and small-cap peers.

Sector Performance (S&P 500, Total Returns, 2017-2019 Combined)

• Information Technology: +103% – Led by advancements in cloud, mobile, and semiconductors.
• Communication Services: +18% – Mixed results; legacy media lagged while digital platforms thrived.
• Financials: +37% – Supported by rising rates early on, volatility in 2018, and recovery in 2019.
• Industrials: +35% – Global trade turbulence limited gains, but 2019 showed resilience.
• Consumer Discretionary: +58% – Fueled by e-commerce and consumer services.
• Health Care: +56% – Strong throughout the cycle even before COVID, bolstered by biotech and managed care.
• Materials: +33% – Cyclical exposure kept returns moderate.
• Real Estate: +40% – Benefited from lower rates in 2019 after a challenging 2018.
• Utilities: +46% – Steady compounding amidst volatility.
• Energy: -9% – The only sector to decline, struggling with oil price volatility and oversupply. However, the rise of AI may change this landscape.

Conclusion: Policy, Market Breadth, and Future Outlook

The 2017-2019 bull market highlighted the breadth and resilience of U.S. equities. While large-cap tech took center stage, mid- and small-caps also participated, reflecting a healthy market structure.

Several policy drivers supported this advance:

• The Tax Cuts and Jobs Act (2017) reduced the corporate tax rate from 35% to 21%, boosting corporate earnings.
• Deregulation in finance and energy created a more favorable investment environment.
• A shift from Federal Reserve tightening in 2018 to rate cuts in 2019 restored liquidity and investor confidence.
• An unprecedented period of global peace with no significant conflicts.

These factors combined to create a robust bull market across various indexes and sectors, demonstrating how fiscal and regulatory decisions can stimulate growth in technology and broad market participation.

Looking Ahead (2025 and Beyond)

As we look to the future, the market may be entering a new phase of expansion:

• World peace initiatives (6-12 agreements under Trump in 2025) are expected to ease global tensions, fostering a stable investment and trade environment.
• Lower energy costs will benefit both consumers and industries, helping to alleviate inflationary pressures.
• Tariff reductions by 47 nations could enhance global trade flows and improve profit margins for multinational companies.
• Lower interest rates will restore liquidity, encouraging capital investment and boosting equity valuations.
• International equities, affected by the ongoing Ukraine War, remain undervalued compared to U.S. counterparts, positioning them for potential leadership in the next cycle.
• World Demand – With a global population of 8 billion, increasing by 70-90 million annually, demand from regions like Arabia, South Asia, India, and Africa continues to rise.

In conclusion, as pro-growth policies fueled the 2017-2019 bull run, today’s combination of peace initiatives, reduced tariffs, easing monetary policy, lower debt burdens, and favorable global conditions suggests that both U.S. and international equities may be on the brink of another significant expansionary cycle.

Citations

1. Slickcharts. S&P 500 Annual Total Returns 1926–Present. Available at: https://www.slickcharts.com/sp500/returns/details
2. Macrotrends LLC. S&P 500 Historical Annual Returns. Available at: https://www.macrotrends.net/2526/sp-500-historical-annual-returns
3. Bankrate. A history of the Federal Reserve’s interest rate changes. Available at: https://www.bankrate.com/banking/federal-reserve/history-of-federal-funds-rate/
4. FedPrimerate.com. Federal Funds Rate History. Available at: https://www.fedprimerate.com/fedfundsrate/federal_funds_rate_history.htm
5. International Monetary Fund. The Long-lasting Economic Shock of War. IMF Finance & Development, March 2022. Available at: https://www.imf.org/en/Publications/fandd/issues/2022/03/the-long-lasting-economic-shock-of-war
6. White House (2025). President Trump Brokers Another Historic Peace Deal. Available at: https://www.whitehouse.gov/articles/2025/08/president-trump-brokers-another-historic-peace-deal/
7. Associated Press. Armenia, Azerbaijan sign peace deal at White House with Trump as host. Available at: https://apnews.com/article/donald-trump-white-house-armenia-azerbaijan-069379e9c4a058c96af38afbf4684829
8. Newsmax (George Mentz). Trump’s Global Economic Breakthrough. Newsmax Finance, August 25, 2025. Available at: https://www.newsmax.com/finance/georgementz/trump-global-economy/2025/08/25/id/1223840/
9. Cato Institute (Susan Dudley). Deregulation Under Trump. Regulation, Summer 2020. Available at: https://www.cato.org/regulation/summer-2020/deregulation-under-trump

Additional References (Trump Tax Cuts → GDP/Economic Impact)

1. U.S. House Ways and Means Committee. Extending Trump’s Tax Cuts Would Boost Jobs, Wages, and Economic Growth . April 21, 2025. Projects a short-run real GDP boost of 3.3–3.8%, and a long-run increase of 2.6–3.2%. Available at: https://waysandmeans.house.gov/2025/04/21/study-extending-trump-tax-cuts-would-boost-jobs-wages-and-economic-growth/

Tax Policy Center. How Might the Tax Cuts and Jobs Act Affect Economic Output? Shows GDP growth rising from 2.4% in 2017 to 2.9% in 2018, likely due largely to the tax cuts, then moderating to 2.3% in 2019. Available at: https://taxpolicycenter.org/briefing-book/how-might-tax-cuts-and-jobs-act-affect-economic-output

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