President Donald Trump’s recent trade deal announcements could provide a significant boost to the markets, according to Pacer ETFs Distributors President Sean O’Hara. O’Hara discussed the potential positive impact of Trump’s tariffs on market performance. O’Hara highlighted that while tariffs have been controversial, the new deals suggest a possible reduction in trade tensions and an opening for better economic relations, both of which are likely to invigorate investor confidence.
“The market is always looking for signs that political hurdles can be cleared, and these announcements from President Trump could be a big tailwind,” he said. Investors are particularly attentive to how these trade policies will unfold and their long-term implications for both local and global markets. A decrease in trade restrictions could lead to increased trade activities, positively affecting market performance.
The recent volatility in the stock market has led to comparisons with the Great Depression. The Dow Jones Industrial Average has tumbled 9.1% in the first three weeks of April, the index’s worst performance for any April since 1932. The S&P 500 has plunged 14% over the course of Trump’s first term, marking the worst performance through April 21 for any president since records began in 1928.
Goldman Sachs CEO David Solomon commented on Tuesday that the confusion around Trump’s ever-changing policy has hurt businesses’ ability to make necessary adjustments. “The level of uncertainty is too high. It’s not productive,” Solomon said.
Trump’s impact on investor confidence
“It will have an effect on the growth of the economy, and we will see that, in my opinion, relatively quickly.”
The global economy is feeling the impact of Trump’s trade policies. According to the IMF on Tuesday, we are likely entering a new era for the global economic system that has operated for the last 80 years.
The organization predicted slowing economic growth, particularly in the United States, and a resurgence of inflation. This combination of slowing growth and rising inflation can lead to economic difficulties. As traders have pulled money out of American stocks and bonds, they’ve been investing in assets around the world.
The MSCI All-World index, excluding the United States, has risen 2.9% over Trump’s new term. This is roughly on par with the beginning of President Joe Biden’s term. Fearful of a global recession, traders have dramatically sold off oil, giving US crude its worst start to any presidential administration since former President Bill Clinton’s second term.
Oil has fallen 19% during Trump’s second term, as traders worry about decreased demand for travel and shipping. Meanwhile, gold, a traditional safe-haven asset, has surged. It reached over $3,500 an ounce on Tuesday, skyrocketing nearly 25% during Trump’s new term.
This has eclipsed the previous record of 13.5% during former President Jimmy Carter’s term in 1977.
