President Donald Trump, who once celebrated stock market highs during his first term, has remained noticeably silent about Wall Street since returning to office in January.
Even when the S&P 500 briefly reached a record on February 19, he did not highlight the milestone. Now, markets are struggling, with the S&P 500 dropping below its January levels. Bitcoin, which once surged alongside Trump’s influence, has declined by 20% in the past month.
Markets struggle as investor confidence wanes
The current stock market behavior diverges from what occurred during Trump’s initial presidential year. The period of 2017 included both economic improvement and reduced interest rates. A strong role came from the Federal Reserve System in backing the market stability while Trump’s tax relief measures created substantial market gains. The S&P 500 registered back-to-back years with more than 20% growth throughout 2023 and 2024 which had not occurred since the late 1990s.
Market prices will eventually reach their maximum point. High valuations have led stocks to reach their highest points while the initial driving stocks have lost their leadership position. Seven AI-driven tech stocks constitute around thirty percent of the total worth of the S&P 500 index. Stock performance has declined because those equity assets no longer provide the same level of upward movement. Thanks to Trump’s ascension to the presidency Nvidia has lost roughly ten percent of its stock value. The S&P 500 consists of 11 sectors with the technology sector ranking as one of two downward performers this year.
New tariffs spark global market concerns
Market unpredictability has grown more substantial due to new proposed tariff measures. Andrew Brenner from National Alliance Securities who leads their international fixed income group stated that daily trade policy announcements have sparked market tensions. Trump announced new sanctions through a 10% tariff against Chinese imports, which will apply on March 4. His announcement included new tariffs for Mexican and Canadian imports, raising trade tensions.
These actions have weighed on global markets. The Nasdaq, heavily populated by tech stocks, has declined 4% this month. European markets reacted, with Germany’s DAX and the Stoxx Europe 600 opening lower. In Asia, Japan’s Nikkei 225 dropped 2.9%, South Korea’s Kospi fell 3.4%, Hong Kong’s Hang Seng lost 3.3%, and China’s CSI 300 benchmark declined by 2%.
Investor sentiment has worsened. Nearly 90% of surveyed investors believe stocks are overvalued. The CBOE Skew Index, which tracks options trades designed to hedge against market downturns, hit an all-time high on February 18. Meanwhile, the Federal Reserve Bank of Atlanta revised its first-quarter GDP forecast, expecting a 1.5% contraction. Just two weeks earlier, it had predicted 2.3% growth. These shifts indicate that Trump’s economic policies are already influencing market conditions.
Temporary market rebound amid political tensions
Friday brought a brief relief to markets. The S&P 500 rose 1.6%, reducing its February losses to 1.4%, while the Nasdaq also gained 1.6%. Nvidia rebounded 4% after an 8.4% decline the previous day. European markets stabilized, with Germany’s DAX and the Stoxx Europe 600 recovering from earlier losses.
Meanwhile, political tensions escalated. During a White House meeting on Friday, Trump clashed with Ukraine’s President Volodymyr Zelenskyy, accusing him of pushing toward a global conflict. He then ended their economic partnership and canceled their joint press conference. Later on Truth Social, Trump stated that Zelenskyy had disrespected the United States and would be welcome back when he was ready for peace.
Despite the ongoing market and political turmoil, Trump expressed optimism about the stock market while addressing supporters in Miami on February 19. However, he exaggerated market gains, claiming the Dow had increased by 10% since his election when the actual rise was under 7%. The S&P 500 had surged 6.25% from election night to February 19 but now stands just 3% higher than November 5.