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US stocks are on course to have lost almost 8 per cent during the rollercoaster first 100 days of Donald Trump’s second term — the worst start for a new administration since Gerald Ford assumed the presidency five decades ago.
Wall Street’s S&P 500 has declined 7.7 per cent since inauguration day as Trump’s aggressive trade agenda has unleashed waves of volatility that have rocked investors’ faith in America’s growth prospects and fuelled concerns about a tariff-induced inflation rebound in the world’s biggest economy. It was little changed on Tuesday morning.
The blue-chip index, which hit a record high in mid February, last fell further over the course of a president’s first 100 days in office in the second half of 1974, when Ford entered the White House following the resignation of Richard Nixon, according to Financial Times calculations based on FactSet data.
US stocks were then caught up in a protracted sell-off driven by a recession and rapidly rising oil prices.
Half a century later, Trump’s attempts to upend the global trade system by slapping steep “reciprocal” tariffs on most countries have plunged US financial markets into fresh turmoil, strategists and investors said.
“We’ve decided to have a fight with every kid in the playground at the same time,” said David Kelly, chief global strategist at JPMorgan Asset Management. “Markets are telling us that there is doubt about whether the US has the advantage when they’ve taken on the whole rest of the world.”
Investors have been left dazed by the barrage of trade-related announcements coming from the White House in recent months, according to George Pearkes, a macro strategist at Bespoke Investment Group.
Stocks tumbled after Trump’s sweeping tariff announcements on April 2, but have recovered much of those losses after the bulk of the levies were postponed for 90 days.
“My model for where we are is Wile E. Coyote with his legs spinning in the air trying to figure out how big of a cliff we’ve just jumped off,” Pearkes said.
The market decline this year has caught off guard most Wall Street investors who had forecast a market boom under a tax-cutting, deregulatory Republican administration. More than 10 of America’s largest banks have in recent weeks slashed their end of year S&P 500 price targets amid an exodus of capital from dollar-denominated assets.
Lisa Shalett, chief investment officer at Morgan Stanley Wealth Management, said investors “have a right to feel exhausted”.
Trump’s “liberation day” tariff blitz “catalysed the market chaos”, she added, “with on again, off again tariff policies promulgating maximum uncertainty periodically punctuated by statements from the administration aimed at reassurance and de-escalation”.
Foreign investors began the year owning a record 18 per cent of US equities but have sold roughly $60bn of their holdings since the start of March, according to Goldman Sachs. European money managers have driven the bulk of the selling.
Both the dollar and US Treasuries have also been hit by investors’ response to Trump’s erratic tariff announcements.
In equity markets, recently high-flying US tech stocks have been hardest hit, both by Trump’s tariffs and the emergence of Chinese AI start-up DeepSeek, which stunned investors in January when it claimed to have built a large language model for a fraction of the cost of its Silicon Valley rivals.
In December, Tesla, Alphabet, Nvidia and Meta — members of the so-called Magnificent Seven — were among the most popular, richly valued US stocks, according to an analysis by Citigroup.
All four have since become “crowded shorts” as investors have trimmed their exposure to and in some cases begun actively betting against their shares, Citi said in a note to clients this week. “Anyone who was all in on the [Magnificent Seven] has been hurt,” said JPMorgan’s Kelly.
Trump himself has repeatedly dismissed the negative market reaction to some of his tariff announcements, and may have graded his first 100 days “on the basis of whether he’s done what he said he would, rather than on whether the results have so far been good or bad”, said Thierry Wizman, global foreign exchange and rates strategist at Macquarie.
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