The U.S. stock market has been struggling since President Donald Trump took office for his second term in January.
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Watch the full interview here:https://t.co/0CvrpotNVF@GoldmanSachs… pic.twitter.com/LpJ5OUg4c1
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All three major indexes are in the red, with the tech-heavy Nasdaq down more than 1% since the start of 2025. Investors had been optimistic about the prospects of a business-friendly Trump administration.
However, concerns about inflation and uncertainty around Trump’s trade and tariff policies have weighed on the market. On Tuesday, stocks largely declined as investors reacted to a poor outlook from consumers. The Conference Board’s consumer confidence index saw its largest monthly drop since August 2021.
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What’s driving this decline? Will Indian markets stay resilient as the US tops out? @nikunjdalmia breaks it down! pic.twitter.com/rIcYi1e0Tu
— ET NOW (@ETNOWlive) February 27, 2025
Defensive trades gaining steam with Cons Staples leading today and Health Care maintaining lead YTD … NASDAQ down most today and down by 3.1% MTD; Russell 2000 Growth down most MTD pic.twitter.com/daCiGoHntX
— Liz Ann Sonders (@LizAnnSonders) February 25, 2025
The Dow managed to close slightly higher, but the S&P 500 and Nasdaq both ended lower for the fourth session in a row. As investors brace for uncertainty, they appear to be moving away from stocks into safer assets like government bonds. The yield on the 10-year U.S. Treasury slid to 4.29% on Tuesday, signaling concerns about weaker-than-expected economic growth.
Trump policy concerns hit stocks
Cryptocurrencies, which are considered risky assets, have also taken a hit. Bitcoin, which surged as high as $106,000 around Trump’s inauguration, is down about 16% in the past month.
REPORTER: We've seen consumer confidence this week have a sharp drop from last month, the biggest dip in 3 years. Why is that?
TRUMP: If you look at confidence in the nation, it had the biggest increase in the history of the chart after the election. pic.twitter.com/ns7TE6xrf9
— Aaron Rupar (@atrupar) February 26, 2025
While U.S. stocks are struggling, global markets are shining. Europe’s STOXX 600 Index has gained almost 10% this year, and Chinese equities continue to outperform the U.S.
Some strategists believe that strong corporate earnings will drive stocks higher despite the looming uncertainty. “While we continue to expect volatility ahead as investors grapple with the potential impact of Trump’s proposed policies, we believe markets are likely to refocus on fundamentals that should support the equity rally further,” said Solita Marcelli, chief investment officer for the Americas at UBS Global Wealth Management.
However, others are more cautious. Two out of three traders believe the market is overvalued, according to a recent survey by Charles Schwab. The VIX, a measure of market volatility, surged to its highest level this year on Tuesday before retreating.
As the market grapples with the uncertainty surrounding Trump’s policies, investors will be closely watching economic data and corporate earnings for signs of where things are headed.