The AI Boom Behind the Bull: How Trump’s First Year Drove a 28% Market Surge

• by Shimanta Das
• October 28, 2026

Since President Trump took office, the stock market has surged approximately 28%, fueled largely by an artificial intelligence boom that has reshaped investor expectations. While the headline gain is impressive, the rally has been anything but smooth. Government intervention reduced downside risk at a critical moment, providing a safety net that helped markets recover from early policy-driven volatility. More importantly, the AI revolution has created a new class of market leaders, with companies like Nvidia and Intel at the center of the storm. As one analyst put it, the company became central to U.S. technological leadership, and investors are now pricing future dominance in a critical technology sector. This forward-looking optimism has outweighed lingering concerns about trade tensions and regulatory uncertainty.

Yet the rally has been uneven. Investor sentiment remained weak for much of the period, as sticky inflation in housing, insurance, and energy prices kept the Federal Reserve cautious on interest rates. The labor market, however, remains resilient, providing a cushion for consumer spending. Sector performance tells the story: energy led the way with a +30% year-to-date return, while technology and industrials also posted strong gains. While Nvidia dominates GPUs, Intel’s CPUs remain essential for many workloads, ensuring that the AI supply chain benefits a broad range of companies. This diversification of winners has helped sustain the rally even as some high-flyers stumbled.

Looking ahead, the key takeaway is clear: Trump’s first year produced one of the strongest presidential market performances investors have seen in more than a century. From the 2024 election through October 20, 2026, the S&P 500 gained roughly 39%, as corporate earnings and business investment outweighed policy-driven volatility. The AI boom has not only boosted tech giants but also revitalized traditional sectors through increased demand for computing power and infrastructure. However, risks remain. The Fed’s cautious stance and persistent inflation could temper gains, and any slowdown in AI spending would hit valuations hard. For now, though, the market’s message is unmistakable: the AI-driven bull market