Donald Trump has a reputation for being a tough leader who never backs downāexcept when the stock market takes a hit. In recent months, his greatest obstacle hasnāt been China or Congress, but the S&P 500 index.
š¢ When the Market Bleeds, Trump Backs Off
It seems that the stock market influences Trump more than any geopolitical issue. As soon as the market shakes, he softens his aggressive tone.
šø He imposed new tariffsāthen froze them for 90 days after markets panicked.
šø He criticized Fed Chair Powellāthen pulled back when stocks dropped.
šø He tightened his stance on Chinaāthen immediately softened it when the market dipped.
According to The Wall Street Journal, thereās no grand strategy behind these U-turns. Reportedly, his own advisors convinced him the markets couldnāt handle it. Trump himself admitted he slowed down because āpeople started getting a little sickā watching the markets tank.
š§ Markets as a Mirror of Public Sentiment
Former advisor David Urban says Trump treats the markets as a barometer of public mood. He watches them constantly and reacts accordingly. But therein lies the contradiction:
āHe wants strong stocks, but also wants to punish trade partners and bring factories back. Thatās a hard balance to strike.ā
š CEOs Sound the Alarm
This week, Trump met with executives from Walmart, Target, and Home Depot, who warned him that his tariffs are destroying supply chains and raising prices.
š S&P 500 Drops ā and So Do Illusions
Since Trumpās return to the White House, the S&P 500 has dropped by 10%āthe worst start to any presidency in decades. Trump blames his predecessor Biden and warns of a āKamala crashā if leadership changes.
Even as markets slump, Trump insists things are going great. After his tariff announcement caused the biggest sell-off in years, he tweeted:
āTHE MARKETS WILL FIGHT. THIS IS A GREAT TIME TO CRASH IT.ā
Then he reversed course: āITāS A GREAT TIME TO BUY!!ā
šļø Past vs. Present
Trump loves to tout his market successāclaiming stocks rose 88% during his first term. The reality? More like 67%, which did beat Bidenās 56%, but fell short of Obamaās first term, which soared over 140% as the economy rebounded from the 2008 crisis.
After winning the 2024 election, the markets briefly surgedābut now? Those gains have vanished. Completely wiped out.
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