What does the equity term structure tell us about Trump 2.0′s first 100 days in office?

• Short-term assets gained value, while the overall equity market declined in Trump 2.0’s first 100 days. • Investors overestimated Trump’s policy impacts, causing market overreactions. • Pre-election, dividend prices negatively correlated with Trump’s winning probability. We analyze the equity term structure during Trump 2.0’s first 100 days to examine the narrative from the Trump administration that his policies will bring short-term pain in exchange for long-term gain. We find that the price of short-term assets (assets that entitle the owner to the dividends of the aggregate market over the near term) increased in value, whereas the aggregate market itself decreased in value. This differs from the president’s narrative. The evidence from the pre-election period suggests that investors might have initially overestimated the short- and long-term impacts of Trump’s policies.