Since President Trump’s election in 2016, the stock market has experienced a significant boom, upwards of 35% as of earlier this year, according to sources like Morningstar and Google Finance. However, the market saw its worst start to a year in decades, losing roughly 10% since October. While many factors played a role in this drop, including concerns about a surging U.S. dollar, trade tensions between world powers, and a possible interest rate hike by the Federal Reserve in March, President Trump’s insistence on raising tariffs has created long-term uncertainty within the stock market. Tariffs have led to manufacturer price increases, job losses, and falling profit prices, according to corporate earnings reports. Companies such as GM and Whirlpool have warned that the rising costs associated with tariffs could greatly impact their earnings in upcoming quarters. The potential for an economic downturn and political retaliation could spur further downside and cement a recessionary outlook. While the market may bounce back, current trends suggest a prolonged downturn could impact the economy beyond the stock market, leading to prolonged joblessness and economic stagnation. President Trump’s enthusiasm towards a trade war has the potential to inflict damage that extends beyond markets, leaving an impact on the economy at large.
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