The Stock Market Slump: Why Trump's Policy-Driven Trade Narrative Is Fading

For much of his presidency, Donald Trump used the stock market as a key metric of his economic success. He frequently touted market gains as proof of his policies' effectiveness, pointing to rising indexes as validation of his tax cuts, deregulation efforts, and aggressive trade negotiations. However, as market sentiment has shifted and economic uncertainty has grown, Trump has gone noticeably quiet on the subject.

The reason for his silence is clear: the stock market no longer aligns with his narrative. The same policies that once fueled optimism are now viewed with greater skepticism, and broader economic forces—rising interest rates, inflation, and geopolitical instability—have overshadowed his legacy in the markets. Investors are no longer reacting to Trump’s policies in the same way they once did, leading him to shift his political messaging elsewhere.

The Market’s Initial Embrace of Trump’s Policies

The Stock Market Surge During Trump’s Presidency

When Trump took office in 2017, the stock market surged. His administration’s corporate tax cuts, deregulation, and pro-business stance fueled a rally that saw the S&P 500, Dow Jones Industrial Average, and Nasdaq reach record highs. Investors welcomed policies that lowered corporate tax burdens and removed regulatory roadblocks, leading to greater confidence in growth and profitability.

The Role of Trade Policy in Market Movements

Trump’s trade policies also had a significant impact on market behavior. His administration’s tariffs on China, renegotiation of NAFTA (resulting in the USMCA), and tough stance on international trade agreements were initially seen as bold moves to protect American industry. Despite periodic market volatility during trade disputes, investors largely believed Trump’s approach would benefit domestic companies in the long run.

The Mood in Markets Has Darkened

Shifting Economic Conditions

While Trump was able to ride a wave of market enthusiasm during his presidency, economic conditions have since changed dramatically. The post-pandemic economic landscape is far more uncertain, with inflation concerns, rising interest rates, and fears of a global slowdown weighing on investor sentiment.

The End of the Pandemic Stimulus Boom

The stock market’s historic surge in 2020 and 2021 was largely fueled by government stimulus measures and ultra-low interest rates—policies enacted by both the Trump and Biden administrations. As those conditions faded and the Federal Reserve began tightening monetary policy, markets corrected. The sectors that benefited most from Trump-era policies, including tech and finance, have since experienced downturns, making it harder for Trump to take credit for stock performance.

Trump’s Policies Losing Influence Over Market Sentiment

Investors no longer see Trump’s trade and tax policies as the primary drivers of market behavior.

• Tax cuts, once a major catalyst for corporate growth, are now baked into market expectations rather than serving as a fresh stimulus.
• Trade policies, particularly tariffs, are increasingly viewed as a source of economic uncertainty rather than a strategic advantage.
• Market focus has shifted toward macroeconomic trends such as Federal Reserve policy, global inflation concerns, and supply chain disruptions.

Why Trump Has Gone Quiet on the Stock Market

Market Performance No Longer Aligns with His Narrative

During his presidency, Trump was quick to take credit for stock market highs. However, with markets experiencing increased volatility and weaker performance in recent years, associating himself with Wall Street is now more of a risk than a reward.

• If Trump continues to claim ownership of stock market trends, he would also have to address periods of decline and economic uncertainty, which could hurt his economic credibility.
• The days of near-continuous stock market gains under his policies are over, making it harder to frame the market as proof of his success.

Focus on Other Political Issues

Instead of discussing the stock market, Trump has pivoted to other political topics that resonate more with his base. Issues like immigration, crime, and foreign policy have taken center stage in his rhetoric, reflecting a shift away from economic bragging to more culturally and politically charged themes.

Fear of Backlash if Markets Continue to Struggle

Trump’s political brand is built on projecting strength and control. Associating himself too closely with the stock market’s performance—especially during a period of heightened volatility and economic uncertainty—carries significant risks. If the market were to enter a prolonged slump, critics could easily use his past boasts against him, arguing that his policies were not as effective as he claimed.

By staying quiet on the market, Trump avoids potential criticism and shifts responsibility to the current administration, allowing him to frame economic struggles as failures of his successor rather than reflections of his own policies.

Conclusion

Trump’s silence on the stock market reflects a shifting economic and political landscape. While he once proudly used stock gains as evidence of his successful policies, today’s market conditions no longer support that narrative. The post-pandemic economy, rising inflation, and a Federal Reserve-driven market downturn have overshadowed the impact of his tax cuts and trade policies, making it less advantageous for him to focus on stocks.

As a result, Trump has strategically shifted his messaging to other political issues, leaving the stock market out of the spotlight. Whether this remains the case will depend on how markets evolve and how closely investors continue to associate Trump’s policies with their financial outlook. For now, though, the stock market is no longer the political talking point it once was.

Author: Brett Hurll