The stock market has been on a downward trend in recent weeks, as Wall Street continues to react to the ever changing political climate and private sector response to several of President Donald Trump’s policies.
But what specifically is to blame for the latest drop in the stock market? Mark Hamrick, a senior economic analyst from Bankrate, shared with WWL News Radio that the current issue is the ambiguity coming from the administration, as well as a rocky jobs report.
On Tuesday, following reports of stricter tariffs from President Trump, the Dow fell by 1.3% in morning trading, after having fallen 890 points on Monday. The broader S&P fell 1.1% on Tuesday and 2.7% on Monday.
While some are raising the red flag, Trump’s Commerce Secretary, Howard Lutnick, said last week that “the fact that the stock market goes down half a percent or percent, it goes up half a percent or percent, that is not the driving force of our outcomes.”
One of the biggest issues Hamrick flagged for the economy and Wall Street was the “high degree of uncertainty” the country is facing right now, as well as “the apparent certainty that tariffs may be here to stay.”
Hamrick said that the impacts of Trump’s tariffs could come in a variety of ways, and Americans may soon feel pressure because of them.
“They can have a variety of impacts. They can raise prices. They can slow growth. And then we’re in a trade war,” he said. “So, we’ve heard the stories about, for example, American bourbon being pulled off the shelves of Canadian stores. We’ve seen retaliation where electricity prices coming from Canada are being raised.”
With Trump and Canada going back and forth in the ongoing trade war, Hamerick says that Americans are being left to face the one issue they found most important in the last election: inflation.
“This is not going to help inflation. It may well inflame inflation, and we may well see a slowdown in growth,” Hamrick said. “And so those are the things that we’re looking at, and obviously we’re seeing significant declines in the stock market.”
When it comes to Trump’s response to the stock market so far, Hamrick says he’s left many scratching their heads over his apparent acceptance of economic strains.
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“I think perhaps what bothered people here is, in the past, Trump was seen as being hyper-sensitive to the performance of the stock market,” he said. “I don’t ever recall a president who would have appeared agnostic to the notion of a recession or an economic downturn.”
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