Analysis: U.S. stock valuations are at historical highs, and Trump's new term may struggle to replicate a bull market

ChainCatcher news, according to Jinshi reports, numerous market indicators suggest that Trump's new term will face a historically high valuation in the U.S. stock market. Data shows that the proportion of stocks held by American households has risen from 48.3% at the beginning of 2024 to 51.8%. This indicator has the most significant four-year return forecasting ability since 1952, and current data indicates that the actual annualized return rate of the U.S. stock market from 2025 to 2029 may be -1.5%.

Although the household stock allocation reached a historic high during the 2020 inauguration, the S&P 500 index still achieved an inflation-adjusted annualized return of 9.3% (higher than the average level of 7.2% since 1952), the current market situation has changed significantly. Multiple valuation indicators are currently at high levels above 90% relative to their historical distribution since 1950, 1970, and 2000, with some even reaching extreme values of 100%, indicating that U.S. stock returns over the next four years may only keep pace with inflation. Trump will face significant challenges if he wants to maintain his tradition of using stock market performance as a measure of achievement.