President Donald Trump once touted the stock market as a testament to his success in office, but since his inauguration, he has largely remained silent on the topic. The S&P 500 index has fallen almost every day since February 19, when it reached a record high, and is now lower than it was when Trump took office.
Despite this, investors remain nervous about an impending sell-off, with many believing that the market is overvalued. A recent survey by Bank of America found that nearly 90% of fund managers think stocks are overvalued, while the CBOE Skew Index reached its highest level ever on February 18, suggesting that investors are bracing for a potential downturn.
The shift in Trump’s attitude towards the stock market is significant, given his previous enthusiasm for the topic. During his first term, he regularly took credit for the market’s boom and pointed to it as a sign of optimism. However, since then, his comments have been noticeably absent.
The S&P 500 has fallen across various indexes, including those tied to the economy, with some stocks losing significant value. The Magnificent Seven, a group of large tech stocks driving the AI boom, are now contributing to market volatility.
As big tech’s share prices rise and fall, they become an anchor weighing down the rest of the market. Nvidia, one of the largest tech stocks, has fallen nearly 10% since Trump’s inauguration. The challenge facing Trump is that even with the new administration in place, it remains difficult to engineer a buoyant stock market, especially if big tech continues to struggle.
Investors are particularly concerned about the potential for reciprocal tariffs and trade wars, which could spark a downturn and upend the Federal Reserve’s efforts to combat inflation. With nearly 90% of survey respondents believing that stocks are overvalued, it is clear that investors are nervous about the market’s uncertain direction.
Source: https://www.nytimes.com/interactive/2025/03/01/business/trump-stock-market.html