When U.S. President Donald Trump won the 2024 presidential election in November last year, markets were in a relatively buoyant mood.
Talk of deregulation and tax cuts drove consumer sentiment, while easing inflation led investors to believe multiple Fed rate cuts would come, boosting the stock market.
Now, there seems to have been a stark reversal in expectations. Trump’s tariff announcements and, sometimes, walking back on the threats have sent markets on a rollercoaster ride.
This comes as investors are anxious about how his retaliatory tariffs will affect the broader U.S. economy, which is already showing some signs of weakness.
The specter of a recession looms large, like the sword of Damocles over the stock market. The question is, will the sword actually cut market returns, and if so, when?
All three major U.S. stock indexes fell on Thursday as investors weighed the latest tariff-related news from Trump, including new tariffs aimed at foreign automakers. The Dow Jones Industrial Average dropped 0.37%, while the S&P 500 declined 0.33% and the Nasdaq Composite slid 0.53%. Shares of several automakers declined after Trump announced 25% tariffs on “all cars that are not made in the United States,” which will go into effect on April 2. General Motors pulled back more than 7%, while Ford slipped nearly 4%. Over in Europe, the pan-European Stoxx 600 slipped 0.44%.
Several analysts on Wall Street see a clear winner emerging from President Donald Trump’s new auto tariff policy: Tesla. So far, multiple analysts see Elon Musk’s electric vehicle giant as a relative beneficiary given its domestic production. To put it simply: “Tesla wins, Detroit bleeds,” wrote Bernstein analyst Daniel Roeska in a Thursday note to clients.
