Investors concerned about market decline due to new tariff policies, uncertainty surrounding Trump's actions.

From Yahoo Finance: 2025-04-07 16:38:00

Investors are speculating on Trump’s reaction to stock market losses after new tariff policies caused a 10% drop on Wall Street. The “Trump put” that supported equities in his first term seems less likely now. Market selloffs have deepened, leaving some hopeful for policy changes but others skeptical of a rebound.

Some investors believe that Trump won’t tolerate significant stock market declines due to the impact on his popularity and political agenda. Speculation online suggests Trump may be intentionally crashing the market to influence the U.S. Federal Reserve. However, Trump denies engineering the selloff, attributing it to necessary measures to address the trade deficit.

Tariffs have caused a significant decline in the market, erasing nearly $5 trillion in value over two days. Concerns about consumer confidence, trade wars, and inflation persist, with doubts about the economy’s resilience. The Fed’s ability to intervene and buoy the market is uncertain, with both Trump and Powell suggesting that immediate recovery is unlikely.

The Fed’s hesitation to cut rates and Trump’s call for action create uncertainty about who will act first to stabilize the market. Inflation and economic conditions could limit the Fed’s options, removing the possibility of a “Fed put” to support financial markets. The market is grappling with uncertainty and lacks immediate solutions to reverse the downward trend.



Read more at Yahoo Finance: Analysis-Tariff-whipped Wall Street wonders: will Trump blink?