Wall Street is seeing right through the Trump 2.0 spin
here.
New York
CNN
—
So, what happens now that President Donald Trump has art-of-the-dealed his way out of his own centerpiece economic initiative because it nearly broke financial markets?
No one knows. But the White House may have finally torched its credibility on Wall Street.
Investors and analysts outside the MAGA ecosystem saw right through the White House's almost-comical line that Wednesday's tariff U-turn was all part of the plan. Those same folks were similarly unmoved Thursday when Trump dangled tax cuts and deregulation, two of Wall Street's favorite things, right in front of their noses. And they're looking right past a positive inflation report that, in normal times, would be a cause for celebration.
Wall Street's response to Trump's tariff reversal is not a victory lap for investors, it's a gasp for oxygen.
Nathan Howard/Reuters
Related article
Trump wants to play market hero. But the economic damage is done
Stocks tumbled Thursday, with the Dow sinking more than 1,200 points, and the S&P 500 creeping ever closer to bear-market territory. Oil fell 4.6% to near $60 a barrel, giving up all of Wednesday's gains, as traders feared a global recession could sap demand.
"The market is effectively putting its pencils down and saying, ‘I'm not buying into this,' Daniel Alpert, managing partner of Westwood Capital, told me. "I can't make a determination of what my risk–reward is right now, until there's further clarification."
Wednesday's tariff pause brought stock and bond markets back from the brink, a sharp rally that Trump was quick to claim credit for. But Thursday morning, investors woke up to a new reality:
Tariffs on China are at a once-unthinkable 145%, revised up from 125% on Thursday, and 104% on Tuesday.
Tariffs on most of the rest of the world are 10%, enough to cost the typical middle-class American household more than $3,400 a year, according to research published Thursday by The Budget Lab at Yale.
The average effective US tariff rate has gone up to 25%, the highest since 1909.
Despite promises of a tax cut and deregulation, Trump has promised to raise $6 trillion over 10 years from his tariffs, which would serve as the largest tax hike in US history.
JPMorgan Chase didn't alter its recession forecasts after the tariff pivot, as researchers at the bank still see a 60% chance of a US and global recession.
The bond market panic largely abated overnight, but US stocks tumbled despite good news from the Consumer Price Index report for last month, which found inflation cooled faster than expected. Not even the news that House lawmakers advanced Trump's budget blueprint, which includes "the Largest Tax and Regulation Cuts ever even contemplated," Trump wrote cheerfully in a Truth Social post, was enough to lift investors' spirits.
Even Trump seemed to concede on Thursday there were some "transition problems" with the sudden shift in policy.
A lot can happen in 90 days under Trump 2.0. And that's part of the problem for Wall Street. Given all the rug-pulls markets have experienced already, investors' can't always trust that Trump will do the thing he says he's doing, or that he won't back out at the last minute.
That's keeping many investors on the sidelines for now. Unless the White House can actually hammer out dozens of complex bilateral trade deals over the next three months, "we're going to be right back in this again," Alpert noted.
https://edition.cnn.com/2025/04/10/business/wall-street-stocks-trump-nightcap/index.html
