Why Trump Is Staying Silent on the Stock Market’s Performance

US Stock Market Faces Challenges as Investor Sentiment Shifts

In his first term, Donald Trump frequently boasted about stock market gains. However, this time around, he has remained unusually quiet about Wall Street’s performance. The S&P 500 index has risen only 2.5% since his re-election, a stark contrast to the 20% surge in the same period after his 2016 victory. Meanwhile, European markets have outpaced US stocks, and even China is beginning to shake off its “uninvestable” reputation.

The End of the ‘Trump Trades’?

During his first term, Trump’s economic policies fuelled market optimism, leading to significant stock market gains. JPMorgan noted that Trump tweeted about the market 156 times during his first presidency. However, in 2024 and 2025, his social media focus has shifted towards government spending, the debt ceiling, and tariffs rather than economic growth and stock market performance.

Why Markets Are Losing Confidence

Several key factors have contributed to the downturn in investor sentiment. Initially, Trump’s tariffs were perceived as inflationary but beneficial for domestic manufacturing. However, the narrative has shifted, with many now seeing these policies as harmful to economic growth. Additionally, efforts to cut federal spending, once considered a positive fiscal move, are now viewed as potentially stifling economic expansion.

Recent economic data is also fuelling concerns. Retail sales have suffered their biggest decline in two years, and consumer confidence has dropped to its lowest level in four years. Even small business optimism, which had been rising, appears to have peaked. These indicators suggest that economic growth may be slowing, further dampening investor enthusiasm.

US vs. Global Markets: A Stark Contrast

Unlike the struggling US markets, European stocks have performed exceptionally well. Analysts from Morgan Stanley have even recommended increasing allocations to European equities, noting the region’s stronger-than-expected economic resilience. The US market downturn has also impacted high-profile companies like Tesla, which has seen its stock price plummet by 40% since December due to declining sales and increased competition in Europe.

The Future of US Stocks: What to Expect for the Rest of the Year

Looking ahead, the performance of US stocks will likely hinge on key economic data releases, Federal Reserve policies, and geopolitical factors. While some analysts remain optimistic about a potential rebound, the fading enthusiasm around the so-called “Trump trades” suggests continued volatility. If inflation persists and economic growth slows further, investors may continue shifting their focus toward global markets rather than US equities.

Trump’s silence on the stock market could indicate a cautious approach, as he may be waiting for a stronger rally before making bold claims. However, with investor sentiment turning negative and economic uncertainty on the rise, reviving confidence in US stocks could prove to be a challenging task for the remainder of the year.

Sources: (FT.com, ChatGPT)