- Compared to the last three presidencies, Trump’s second term saw a drop of nearly 20% in stock market performance
- From inauguration day and onwards, S&P 500 has declined by approximately 15.6%
- Since April 2, a loss of over $6.6 trillion in market value has been reported
Scott Melker, a well-known crypto investor and enthusiast, shared Bloomberg’s chart comparing stock market returns in the first 250 days of four US presidencies. It shows Trump’s current second term with the worst showing—down nearly 20%. By contrast, Obama’s and Biden’s presidencies, along with Trump’s first term, had gains of up to 20%.
For instance, since the inauguration day on January 20, the S&P 500 has declined by approximately 15.6%, marking the most substantial downturn in the early months of a presidency since 2001.
How April’s Aggressive Tariff Rollout Triggered a $6.6 Trillion Sell-Off
Naturally, the main cause for this is the current administration’s hardline trade policies. The announcement of sweeping tariffs on April 2 initiated a global market sell-off, erasing an astronomical amount of money.
In two days, the Dow lost >4000 points (~9.5%), the S&P 500 fell 10%, Nasdaq slid 11%—erasing >$6.6T market value.
Tariff Pause Offers Little Relief as US-China Trade Fight Continues
Granted, Trump decided to pause the tariffs for 90 days, which did provide a brief respite but also introduced further uncertainty. However, China was exempt, and the trade war between the two countries continues to escalate.
At the moment, the USA’s tariff rate on Chinese imports now totals 145%, while China has raised its tariffs on US goods to 125%.
Market Jitters Spread: Oil Prices Track Stocks, IPOs Stall
As expected, the volatility has also impacted other sectors. For example, the correlation between Brent crude oil and US equities has reached as high as 0.9. Oil prices now closely track stocks, likely reflecting worries about a global slowdown from Trump’s trade actions.
Interestingly enough, investment bankers report that the IPO market remains stagnant despite the ongoing situation, although companies like Klarna and StubHub delayed their IPO plans due to the high volatility.
With Trade Policy Unclear, Can Markets Find Stable Ground?
Still, with no end in sight regarding the escalating trade tensions, the stock market will likely react accordingly.
While there are bound to be some changes in the coming days and weeks, either positive or negative, it seems that the usual market resilience mechanisms appear less effective amidst all this unpredictability.
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