In his platform for reelection in 2024, President Donald Trump promised to “build the Greatest Economy in History.” But in his first 60 days as president, the stock markets have dropped like a rock: The S&P 500 is down 7%, the Dow Jones has dropped 6%, and the Nasdaq has plummeted 10%. It’s an about-face from Trump’s first term, when the major stock indices all jumped about 5% in the first two months.
And it’s worse than Biden’s first 60 days in 2021, when the Democratic president oversaw an almost 2% gain in the S&P 500.
The market downturn comes as Trump wages an aggressive tariff war against the U.S.’s largest trading partners. “We’re going to raise hundreds of billions in tariffs; we’re going to become so rich we’re not going to know where to spend that money,” the 47th president said last week while boarding Air Force One.
In February, Trump signed an executive order that imposed tariffs on products from China, Mexico, and Canada. China retaliated with its own surcharge on American imports, Canada did the same, and Mexico’s president said the country plans to strike back too.
Trump also issued sector-wide tariffs on steel and aluminum imports, which prompted the European Union to retaliate with its own taxes on American beef, motorcycles, and bourbons, among other products. “We deeply regret this measure. Tariffs are taxes. They are bad for business, and even worse for consumers,” said European Commission President Ursula von der Leyen.
In response, Trump threatened a 200% surcharge on European wine and champagne.
Trump’s trade war has spooked Wall Street and prompted some analysts to warn of a potential recession. “If we would continue down this road of what would be more disruptive, business-unfriendly policies, I think the risks on that recession front would go up,” JPMorgan chief economist Bruce Kasman said on Wednesday.
The stock market downturn under Trump also follows signs that U.S. economic growth is slowing. Gains in gross domestic product dropped from about 3% in the third quarter to just above 2% in the fourth, according to the U.S.’s Bureau of Economic Analysis. And consumer sentiment, or a measure of how Americans feel about the U.S. economy, dipped 10% in March, according to the University of Michigan’s Survey of Consumers.
Despite the market downturn, Treasury secretary Scott Bessent said he’s not worried. “I’m not concerned about a little bit of volatility over three weeks,” he told CNBC on Thursday.