Markets lose faith in the 'Trump put' and start to fear a recession
Investors are losing faith in the existence of a 'Trump put' to prop up markets. The question is whether that holds if sharemarkets keep falling.
US President Donald Trump has stopped using the Dow Jones Industrial Average and S&P 500 as his favourite political scorecards, and is openly talking about a "period of adjustment" for the stockmarket. Investors are increasingly fearful it will be painful.
After a 4% drop overnight, the Nasdaq has now fallen 13% in almost as many trading sessions as investors fear the world’s largest economy is headed for a recession this year.
Trump in his first term pursued market-friendly policies and repeatedly boasted about the performance of the main stock indicies, which repeatedly set new record highs. But in his second term, Trump has instead focused on implementing tariffs and aggressive spending cuts.
“The sorts of policies that the new administration in the US is pursuing are problematic and have increased the very real chances of recession. I think markets are cottoning on to that,” GFSM market strategist Stephen Miller told Capital Brief.
