Responding to a spontaneous market crash of Bushian proportions, White House economic advisor Kevin Hassett took to damage control mode. He reiterated that President Donald Trump wasn’t really trying to crash the stock market with his latest tariff declarations. The comments came on the heels of a tumultuous week for the financial markets. The president’s rollout of retaliatory tariffs on Wednesday ignited fears of a deepening global trade war.
While we can’t know for sure, following that announcement the markets started a dramatic slide. On Friday, the Dow Jones Industrial Average experienced a record crash of nearly 2,231 points. This 5.5% decrease represents the biggest decline since June 2020. The S&P 500 followed in kind, tallying a close to 6% selloff soon after a 4.8% nosedive on Thursday. The tech-heavy Nasdaq Composite was hit hardest immediately after the tariff announcement. It drew back almost 12% in a mere two days, a free-fall that planted it firmly in bear market territory.
Hassett tried to assuage these anxieties on ABC’s “This Week” on Sunday. He stressed that the president’s moves were never intended as a calculated strategy to rattle the markets. “The idea that the president is trying to crash the markets is just wrong,” he stated, countering narratives circulating on social media.
That debate grew hotter after President Trump posted a clip promoting this false narrative to his social media platform, Truth Social. In the reel, he went on to allege that he was purposely tanking markets. The video speculated that this was an attempt to lure cash inflows into treasury securities. As such, it might even lead the Federal Reserve to start cutting interest rates by May. This clip originally went viral on TikTok back in March. Trump retweeted it on April 4, only two days after announcing his tariff.
The sharp market drop indicates that investors are getting more concerned about a long-term global trade war. They’re just as worried about the risk of a deep economic recession. Perhaps most importantly, the market’s reaction highlights just how tenuous investor sentiment is when it comes to trade negotiations and the prospects for underlying economic stability.