Analysis of the second term S&P 500 in DONALD TRUMP, the Dow Jones Industrial Average, and the Nasdaq and how it compares to the initial conditions of Barack Obama and Joe Biden.
Fifteen days after Donald Trump’s second presidency, investors are not sure about the short-term outlook for American business, as he did when he took the oath of office.
In the weeks leading up to Trump’s election to inauguration, the Dow Jones Industrial Average and S&P 500 rose more than 4% as investors were hoping for more business policy. Currently, both indexes are above 6% standing on Election Day. The high-tech Nasdaq has declined by more than 11%.
After several days of volatility throughout April, all three major US indexes narrowed the monthly decline or rise (Dow: -3%, S&P 500: -1%, NASDAQ: 1%).
Uparrow was the first to turn down in February when Trump and his administration deployed tariff plans for Mexico and Canada. Investor concerns about the US economy peaked in April after the US and China announced massive tariffs and Trump threatened to eliminate Federal Reserve Chief Jerome Powell.
How the stock market worked in Trump’s first 100 days
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Intensifying the trade war could put us on the brink of a recession
Since then, Trump has ensured investors that he will not fire Powell, and he and others in the administration have spent the last week easing the tone to China after repeated tariffs on major tech products. Trump announced plans to provide tariff relief to automakers on April 29th, allowing taxes to be offset on some of the parts of vehicles assembled in the US
These first steps helped calm the market, but little has changed elsewhere in the US-China trade war.
A note from Matthew Martin, a senior economist at Oxford economics last week, underscored the importance of restraining the trade war.
And the latest economic figures generally think about where businesses and the economy stand. None – Aside from estimating GDP for the first quarter, the initial impact of tariffs was measured.
“The trade deficit won a new record as a frontline tariff for businesses in the first quarter,” Comerica Bank chief economist Bill Adams said in a memo on Tuesday’s report. He predicted a high trade deficit would cut GDP, a decline of -0.3% in the first quarter, the Bureau of Economic Analysis announced Wednesday.
First quarter GDP falls for the first time in three years
One of the biggest economic issues is based on many 90-day hiatus in tariffs introduced by Trump in early April after the stock market fell and volatility jumped.
“Fear Gauge” jumps to levels that have not been seen since Covid-19 closure
The CBOE Volatility Index (VIX), known as the “Fear Gauge,” measures the way investors bet on the market. A higher number indicates that investors are protecting their investments from further declines in the market.
After hitting unseen highs from the early days of the Covid-19 pandemic, the gauge quickly returned to a higher level – unlike previous shocks where gauges rose for several months.
Of course, Trump is no stranger to the volatile stock market movements during his presidency.
How the stock market worked on the first terms of the recent president
In 2020, rattling investors drove Dow Jones Industry Average over 25% in less than two weeks as Covid-19 led to closures and layoffs. The panic has almost wiped out all of the Trump administration’s profits over the past three years. But by the end of his first term, the Dow had risen 55%.
It is a story that has been told frequently in the past few decades.
Barack Obama entered the White House in the midst of the Great Recession and saw the stock continue to sink before it rose nearly 70% by the end of his first term. Joe Biden enjoyed a similar rebound after 40 years of high inflation receding.
Should I buy and keep a 401(k)?
401(k)S, will the investment method of purchase and retention be rewarded again in the way with the previous shock?
Just a few weeks ago, two days of selling wiped out a $6.6 trillion market value on Wall Street. Since then, stock prices and major US indexes have erased many of these declines. But again, these indices are also quite below the 100-day location.
Perhaps investors say “wait and see” to buy more securities while committing to gradually cut US tariffs, restructuring global trade and bringing manufacturing and employment back to the US
In a breaking news on April 11, BlackRock Investment Institute said “continuous uncertainty is increasing the risk of a recession,” but in order to respond quickly to market tariffs in April, “the US administration has explained some degree of financial risk and costs.”