Investor disillusionment with President Trump’s economic agenda continues to mount. The surprising message from Trump and his top advisers: Bring it.
Two months into Trump’s presidency, stocks are down, and Trump and the investing community are unfriending each other. Wall Street expected the businessman-president to push market-friendly policies and put a floor under asset prices. Instead, Trump has imposed import tariffs more aggressively than anybody expected and dismissed the inevitable adverse reaction in markets.
Stock reversals highlight the whiplash. The S&P 500 (^GSPC) index hit a new high on Feb. 19, marking the moment of peak optimism in Trump 2.0. But Trump continued to amp up tariff threats that investors mistakenly interpreted as symbolic. By mid-March, new tariffs were in place on imports from Canada, Mexico, and China, plus steel and aluminum from everywhere. And more tariffs are coming, Trump says. By March 13, the gloomy realization that the Trump trade war is real pushed stocks down 10.1% from the Feb. 19 peak, a market correction.
Trump’s advisers are now signaling that Trump won’t ride to the rescue. “Corrections are healthy,” Treasury Secretary Scott Bessent said on March 16. “I’m not worried about the markets.”
Chris LaCivita, co-manager of Trump’s 2024 presidential campaign, was more blunt. He told Politico recently that investors worried about stock declines are “a bunch of bedwetters,” and added, “There’s a lot of shock therapy going on right now. It’s very fast. It’s a lot.” LaCivita doesn’t work in the administration, but as a Trump insider, he’s familiar with the president’s thinking.
Trump himself has made a similar point. “You can’t really watch the stock market,” Trump said on March 9, amid a sell-off. He also dodged the question when asked if he was worried his policies might cause a recession, which spooked markets even further.
Read more: What is a recession, and how does it impact you?
If the goal is to dissuade investors that Trump prioritizes the stock market’s performance — as he seemed to during his first term — it’s working. “Trump 2.0 has signaled a reduced reliance on the stock market as a success barometer,” investing firm Evercore ISI explained in a March 16 analysis. “We attribute Trump 2.0’s initial impacts to … a President demonstrating a higher threshold for tolerating economic pain.”
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