Rapturous applause and a sea of phones in the air greeted President Trump as he walked on stage and declared, “The golden age of America has officially begun.”
He was barely a month into office when the Saudi-backed investor conference in Miami captured the optimism. “The Nasdaq is up nearly 10% in just a few months,” Trump said, ticking through a list of economic indicators. “The Dow Jones Industrial Average is up 2,200 points.” On the same day, Feb. 19, the S&P 500 hit an all-time high.
But as Trump unleashed an on-one-day, off-the-next tariff fight with America’s largest trading partners, those gains unraveled. In just a few weeks, the S&P lost $4 trillion in value driven by his whipsaw trade policy, receding optimism about an artificial-intelligence boom and souring consumer sentiment caused by threats of higher prices and weaker growth. A measure of consumer sentiment fell in March for the fourth straight month to the lowest level since January 2021, the Conference Board, a business-research group, said Tuesday.
Markets in the past week have recovered some losses, but Trump is preparing his next shock: an April 2 “liberation day” suite of reciprocal tariffs he said will be applied on any trading partner that charges tariffs or imposes other trade barriers on U.S. products.
CEOs and lobbyists seeking clarity and fretting over what they see as a haphazard approach have inundated Trump’s team with calls, according to people in the administration. Some of these people said the White House has been receptive to hearing from businesses about their concerns, but they said it’s unclear if arguments for a more temperate and targeted approach have persuaded Trump.
Among other factors, investors were caught flat-footed by Trump’s animus toward Canada, which wasn’t a part of last year’s election campaign. Global markets were then roiled by the fallout from the Oval Office meeting between Trump and Ukrainian President Volodymyr Zelensky, which descended into a shouting match.
The spectacle led Germany to approve a once-unimaginable €1 trillion defense-spending deal—with contracts to go to European makers—in the blink of an eye. The package has sent up yields on German sovereign debt and could reduce appetite on the Continent for U.S. Treasurys.
“At the end of last year, the attitude was, ‘Full on, this is going to be an exceptionally pro-growth agenda and it will be executed in a clear way.’ All of that has gone in reverse,” said Ed Al-Hussainy, global interest-rate strategist at Columbia Threadneedle Investments.
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