- Trump no longer appears to be tracking his presidency’s success through the lens of the stock market.
- The president’s persistence with tariffs has led to stock selling in recent days.
- His team has instead suggested it’s eyeing the 10-year Treasury yield as a scorecard.
President Donald Trump isn’t flinching from his sweeping tariff policy in the face of a sharp stock sell-off that has investors fleeing to safe havens this week.
The president on Tuesday plowed ahead with his plan to levy tariffs on goods from Canada, Mexico, and China. The S&P 500 extended a decline that began on Monday when Trump announced there was no last-minute deal coming to avert the tariffs.
The benchmark index fell by as much as 2% on Tuesday, erasing its postelection gains, before paring some losses and finishing the day 1.2% lower. It’s now fallen roughly 6% from recent highs. The Nasdaq 100, meanwhile, entered correction territory in early trading before closing down 0.4%.
During Trump’s first term, such a sell-off would’ve been cause for alarm. After all, Trump frequently cited a strong equity market as evidence that his presidency was going well. He boasted about taking stocks to a “different planet” and regularly posted about the market being up “massively.”
But Trump and his team are sending a message to markets that they’re OK with the fallout in stocks for now. They have a new focus: the 10-year Treasury yield, which has tumbled lately.
In February, Treasury Secretary Scott Bessent pointed to the 10-year yield as a barometer on the president’s radar, emphasizing the focus on borrowing costs for Americans, which are often tied to government bond yields. He reiterated that view on Tuesday.
“Over the medium term, which is what we’re focused on, it’s a focus on Main Street,” he told Fox News. “Wall Street’s done great, Wall Street can continue to do fine, but we have a focus on small business and consumers.”
“He and I are focused on the 10-year Treasury and what is the yield of that,” Bessent said of Trump. “He wants lower rates.”
The yield on the 10-year bond slid by 4 basis points on Tuesday as concerns about tariffs’ effect on economic growth overshadowed fears that a trade war would lead to higher inflation. It has fallen by 35 basis points in the past 10 days.
The rally in bond prices, which move inversely to yields, means Treasurys have outperformed stocks since the election, according to Bloomberg data.
The president’s moves have also challenged the views of Wall Street forecasters who predicted that he’d step in if markets became too volatile.
“On election day S&P 500 closed at 5,783; we say this is first strike price of Trump put, below which ‘Stocks Down Under Trump’ headlines begin, below which investors currently long risk would very much expect and need some verbal support for markets from policymakers,” Bank of America strategists wrote last week.
On Truth Social, the president’s recent posts have largely revolved around tariffs, his immigration policy, and progress on a peace deal between Russia and Ukraine, with no mention of the stock market.
In what is perhaps the best example of how much validation Trump derived from the stock market, in 2020 he sent the Fox News host Lou Dobbs an autographed chart showing the Dow Jones Industrial Average’s nearly 2,000-point rise the day Trump declared COVID-19 a national emergency.
A screenshot from Lou Dobbs Moneyline show on Fox Business.
But the president has been quiet about the stock market lately, saying little to boost investors’ mood even as stocks trade lower than when he won the election in November.
Trump’s team did not respond to a request for comment from Business Insider.
