President Donald Trump doesn’t care about the panic on Wall Street. It was a message he sent out loud and clearly on Thursday, sitting in an oval office with a reporter when he signed the executive order.
When asked if a month’s tariffs had been suspended due to certain imports from Canada and Mexico, he quickly shot them down.
“It has nothing to do with the market,” he said. “I don’t even look at the market because the US is very strong at what’s going on here,” he made it clear – this isn’t about stocks. It’s about trade.
“This is about the companies and countries that tore this country, our country, our beloved United States. And they’re not going to tear us apart anymore, so as you know, I think it’s affecting the market.”
Tariffs surprise Wall Street, just as Trump is throwing them away
The stock market hasn’t had a great week. The main index is red, and investors are rushing to figure out whether Trump will do anything to stop the bleeding. Wall Street operates under the idea of ”Trump Put.” He is a belief that he will not crash the market too hard. But that assumption has weakened by that day.
Instead of dialing back into trade tensions and dialing, the administration is doing the opposite. Trump has just slapped a 25% tariff on some of the US’s biggest trading partners, and it’s hitting the market where it hurts. Nasdaq Composite has fallen 7.5% since mid-February, bank stocks have fallen, and crude oil prices are slipping. Meanwhile, traditional safe havens like the Gold and the US Treasury Department are gathering together.
Despite the confusion, Commerce Secretary Howard Lutnick says this is not a short-term inventory move. “The president wants America to grow and America’s prosperity. And the fact that the stock market will decline by half or percentage means that it will rise by half or percentage, and that’s not the driving force behind our outcome,” he told CNBC. He believes interest rates will fall by more than 1%, and the stock market will “explode” later.
At the moment, investors are not convinced. In 2025, Wall Street pushed stocks high in hopes of tax cuts and deregulation. Instead, they deal with trade wars and slow growth signals.
Financial warning signs continue to pile up
Trump’s tariffs are forcing investors to rethink how serious he is about the protectionist agenda. We all thought he might change his mind the last time, as he did in his first term, but so far, Trump hasn’t gotten tired of it.
For example, the Conference Committee’s Consumer Piousness Index recorded its biggest monthly decline in February since 2021. The manufacturer’s survey, released Monday, pointed to a sharp decline in new orders, along with a jump in input costs.
Meanwhile, the Atlanta Fed’s GDPNOW tracker is flashing warning signs and forecasts first quarter growth at a negative 2.8% annual rate, while other models still show some growth. JP Morgan Economists believe that higher tariffs slow economic activity as businesses pay more for imports and pass those costs to consumers.
That said, the US economy is not yet expected to fall into a recession. Goldman Sachs predicts tariffs will reduce growth rates of 0.2% this year.
There is one bright spot, namely bond. The Bloomberg US Intensive Bond Index has grown 2.7% this year thanks to investors moving towards safer assets like gold. However, inflation still exceeds the federal 2% target, limiting how much central banks can cut, as repeated by Federal Reserve Chair Jerome Powell at the FOMC Postmouth press conference in January.
