The first year of US president Donald Trump’s second term has been an eventful one and his unpredictable policy moves continue to test investor appetite for risk.
Since Trump’s second inauguration on 20 January 2025, his rapidly moving policy agenda has kept investors on edge, driving some big swings in markets.
The most notable being the sell-off in stocks after Trump announced sweeping tariffs on what he called “Liberation Day”, on 2 April.
However, the announcement of tariff deals between the US and various trading partners since eased some investor concerns as the year progressed. Positive trade news helped markets recover, along with strong earnings, investor enthusiasm for AI and interest rate cuts also propelling stocks higher.
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The UK’s FTSE 100 (^FTSE) is up nearly 20% on a one-year basis, at the time of writing, while the pan-European STOXX 600 (^STOXX) has gained 16% in that period. In Asia, Hong Kong’s Hang Seng (^HSI) index is up more than 35% over one year and Japan’s Nikkei 225 (^N225) has risen over 39%.
Over in the US, the main S&P 500 (^GSPC) is trading nearly 17% in the green over one year, while the tech-focused Nasdaq Composite (^IXIC) has advanced nearly 22% and the Dow Jones Industrial Average (^DJI) is up over 14%.
“Trump’s actions over the past year have, or stand to have, a profound impact on consumers, businesses, geopolitics, global trade, and more,” said Dan Coatsworth, head of markets at AJ Bell (AJB.L).
“While businesses have certainly been tested, they’ve had no choice but to adapt to the changing landscape and investors appear to have faith in many companies’ ability to keep growing earnings.”
This year is already getting off to a volatile start, with US military action in Venezuela and Trump threatening new tariffs on eight European countries unless a deal is reached over his proposed takeover of Greenland.
As another year of Trump’s second term gets underway, it’s worth reflecting on some examples of stocks that have been winners and losers over the past 12 months.
Heightened geopolitical tensions and pressure from the Trump administration for European allies to shoulder more of the responsibility for defence costs, saw governments pledge to spend more in this area.
In June, North Atlantic Treaty Organization (Nato) members pledged to increase their defence spending to 5% of gross domestic product (GDP) by 2035.
Lee Wild, head of equity strategy at Interactive Investor, said that Trump has “had a massive impact on the UK defence sector”.
Pledges to increase defence spending has seen investors pile into European stocks operating in the sector, pushing shares higher. · REUTERS / Reuters
Pledges to increase defence spending has seen investors pile into European stocks operating in the sector, pushing shares higher.
For example, BAE Systems (BA.L) is up 71.5% over one year, while Rolls-Royce (RR.L) has surged 117% in that time. Fellow FTSE 100-listed company Babcock International (BAB.L) has soared nearly 195% over one year and FTSE 250 (^FTMC) firm Chemring Group (CHG.L) is up 64%.
“Trump’s recent suggestion that US defence spending increase by 50% to $1.5tn emphasises the direction of travel,” said Wild.
Lale Akoner, global market analyst at eToro, highlighted Germany’s Rheinmetall (RHM.DE) as a “standout” in the sector, with shares in the company up 182.5% over the past year.
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More broadly, AJ Bell’s Coatsworth said that exposure to the defence sector also offered a boost to German steel producer Salzgitter (SZG.DE), which is up 192% over one year.
“The stock soared in July 2025 when its Secure 500 steel product was approved for military use,” he said.
Coatsworth said that Salzgitter “has a history of going in and out of favour, such is the cyclical nature of its business”.
“At the point when Trump started his second term, the steel producer traded on 16 times forward earnings, which was on the lower side relative to history,” he said. “A landmark decision in March 2025 for Germany to spend big on construction and infrastructure meant investors were keen to find potential beneficiaries of this future spending, with Salzgitter (SZG.DE) seen to be one of them.”
Greater geopolitical and economic uncertainty has fuelled demand for gold (GC=F) as a so-called safe-haven investment, driving prices to a succession of fresh highs.
“Investors can thank Trump for one thing – his chaotic second term is directly responsible for the soaring gold price,” said Coatsworth.
“Shares in gold miners often rise by more than the appreciation in the gold price in a rising market,” he explained. “The higher the value of the metal, the greater the potential for gold miners to enjoy fatter profit margins and juicier cash flows.”
Read more: UK growth outlook trails only US and Canada among G7, IMF says
“They were the hot trade in 2025 and Trump’s non-stop actions so far in 2026 have retained the sparkle in this part of the market,” Coatsworth added.
Precious metals miner Fresnillo (FRES.L) was the top performing on the FTSE 100 in 2025 and over one year, shares are up 491%. Meanwhile, shares in Endeavour Mining (EDV.L) are up nearly 169% on a one-year basis.
In contrast, eToro’s Akoner said that consumer and growth names in Europe have struggled over the past year.
Akoner highlighted German sportswear brand Adidas (ADS.DE), which is down more than 37% over one year, and Italian luxury car brand Ferrari (RACE.MI), which has declined nearly 31%, as a couple of examples. She said that they have “lagged as higher-for-longer rates and a softer global consumer weigh on discretionary spending”.
Adidas is down more than 37% over one year. · Eakin Howard via Getty Images
In addition, Akoner said that German software company SAP (SAP.DE) and Dutch payment company Adyen (ADYEN.AS) – which are down nearly 24% and 8% over one year respectively – “have come under pressure as investors rotate away from expensive growth stocks, particularly those with significant US exposure amid renewed trade and regulatory uncertainty.”
Overall, Akoner said that 2025 “rewarded sectors aligned with security, infrastructure and financial resilience, while punishing valuation-sensitive growth and consumer cyclicals”.
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