Trump Trade Dominates Markets Post-Election but Now Flounders
The euphoria that drove stocks to record levels following Donald Trump's presidential win has evaporated as recent tariff escalations and disappointing data spark fears of slow economic growth and stubbornly elevated inflation. The market's reaction to the latest tariffs on Canada, Mexico, and China has been particularly disappointing, erasing about $3.3 trillion in market cap since its record closing high. The S&P 500 is down around 2% since the start of 2025, while the Nasdaq Composite is off nearly 6%.
- The floundering nature of the "Trump trade" highlights how quickly investor sentiment can shift when new information emerges, underscoring the importance of continuous monitoring of economic trends and policy developments.
- Can the market recover from this current downturn if Trump's policies are ultimately found to be beneficial for the economy, or has the damage been done?