11 March 2025
If you are covering the latest fall in the US stock market, please see the following comment from Lindsay James, investment strategist at Quilter:
“The US stock market fell sharply yesterday, with Asian markets dropping overnight, as investors continued to react to a growing sense that Donald Trump is willing to push the US economy to the brink of recession in order to achieve his policy goals. While many investors felt the President cared about what level stock markets were at, it appears he has little interest whilst the country goes through what he calls “a period of transition”.
“It had been widely expected that Donald Trump’s policies, whilst widely trailed in his election campaign, would in reality be watered down in order to maintain a business-friendly environment conducive to ongoing gains in the stock market. However, the reality so far has been quite different, with on again/off again tariffs and no clear lines of negotiation, all perhaps designed to support his broader goal of seeing a manufacturing resurgence in the US. With the promised tax breaks for firms that shift supply chains sitting in budget reconciliation, it is unclear whether firms will buy into his vision and go through the upheaval of moving to a higher cost jurisdiction to avoid what could ultimately be a one-term policy.
“The main losers on markets yesterday were technology companies, with Nvidia dropping more than 5%, whilst consumer discretionary stocks also fell victim to a weakening outlook, pulled down by Tesla which fell 15%, continuing its momentous decline, having now given back all of its post-election gains.
“Whilst the US market continues to benefit from higher levels of earnings growth, with a relatively closed economy, an enormous domestic market and favourable demographics at a time when other markets face greater challenges from slowing international trade, ageing populations and fiscal constraints, investors are continuing to call into question the valuation of US equities in the face of renewed uncertainty. This all comes at a time when Europe may finally be about to get its act together on defence spending and China seeks to capitalise on the recent success of DeepSeek.”
