The “Trump Bump” – which saw stocks surge after Donald Trump’s election and inauguration – appears to have lost steam. Tesla shares, in particular, plummeted on Tuesday, erasing most of their postelection gains driven by CEO Elon Musk’s association with Trump.
Consumer confidence is also taking a hit, with the U.S. Conference Board survey showing pessimism around job availability, business conditions, and future income. The 10-year Treasury yield dropped, and stocks continued to slide. Analysts are now warning of a potential “Trump Slump” if the market doesn’t change course soon.
The Nasdaq Composite fell 1.35% on Tuesday, dragged down by Nvidia’s 2.8% drop, while the Dow Jones Industrial Average added 0.37%. However, some defensive stocks in Europe and the UK rose after their governments announced increased defense spending.
Tesla shares slipped 8.4%, wiping out most of their Trump-related gains. The company’s market capitalization dropped below $1 trillion for the first time since November 7. Investors are concerned about Tesla’s performance, as well as CEO Elon Musk’s growing involvement in Washington D.C.
In other news, Super Micro Computer shares rose after the company filed its financial results just in time to avoid being delisted from the Nasdaq. Apple announced plans to invest $500 billion in the US, including a new factory in Texas to produce artificial intelligence servers. Nvidia is set to report earnings on Wednesday, with analysts expecting $38 billion in sales for the quarter ended in January.
Source: https://www.cnbc.com/2025/02/26/cnbc-daily-open-trumps-policies-are-worrying-investors.html