Wall Street thought they could rely on Trump’s first term playbook. They were wrong.
Money managers came into President Donald Trump’s second term on the promise of tax cuts, DOGE savings, and pro-growth policies that would juice the stock market.
Many viewed tariffs as an afterthought.
«This might cause some market volatility, but we don’t think it will derail US growth», Solita Marcelli, chief investment officer for UBS Global Wealth Management, said of Trump’s tariff plans at a conference in November last year. «Let’s not forget that during his first term, president-elect Trump was quite responsive to market reactions.»
One hundred days after Trump’s inauguration, the S&P 500 is down 10% from record highs, banks across Wall Street have raised recession odds, and investor sentiment is overwhelmingly negative.
How did it all go so wrong? Here are the three lessons Wall Street has learned the hard way over the last 100 days.Tariffs are a bigger-than-expected focus
Wall Street got the biggest piece of the Trump agenda wrong: tariffs.
Trump’s approach during his first term might have given investors a false sense of confidence and predictability.
«In his first term, he gave you all the good stuff first. He gave you the tax cuts, he started deregulating, and then he started focusing on the tariffs, and I think a lot of people expected that to happen again», James St. Aubin, chief investment officer at Ocean Park Asset Management, told Business Insider.
Instead, investors were slammed with executive orders levying tariffs from the start. The final extent of Trump’s tariffs still remains to be seen as the president negotiates with other countries during the 90-day pause, but investors are no longer brushing off tariff concerns as an empty threat.
Some strategists remain optimistic.
