He seems to have shifted his focus this time around, however, as the index moves toward its worst week of year—declining about 4.5% as investors tire of the president’s on-again, off-again tariff threats and reckon with signs of economic weakness. 

Meanwhile, the tech-heavy Nasdaq composite has entered so-called “correction territory,” meaning the index is down over 10% from its all-time high in mid-December.

Markets hate uncertainty, the saying goes, and Trump’s whirlwind policy announcements have greatly unsettled traders. While 25% tariffs on Canada and Mexico—America’s two largest trading partners —were paused on large swaths of imports on Thursday, investors seem wary after Trump pulled a similar move last month.

At the same time, Trump doubled tariffs on China to 20%, while threatening tariffs on steel, aluminum, chips, pharmaceuticals, and autos as well as retaliatory duties on all U.S. trade partners.

Investors also got mixed news when Friday’s jobs report came in slightly weaker than expected. Analysts said the February data from the Bureau of Labor Statistics did not show most of the recent job losses in the federal government. Nonetheless, Bill Adams, chief economist at Comerica Bank, said cuts from Elon Musk’s Department of Government Efficiency, along with tariff uncertainty, did weigh on hiring in the private sector.

“The near-term path of policy is cloudy, and so the economy’s path is cloudy, too,” Adams wrote in a note Friday. “If the government stays the course on big tariff hikes and spending cuts, those policies would continue to weigh on job creation in the next few months, likely pushing the unemployment rate higher still.”

“If the government pivots to focusing on more business-friendly policies like tax cuts and deregulation,” he added, “the private sector’s hiring appetite could recover quickly.”

The “Trump put” is no longer in play

Stocks initially soared after Trump’s win amid enthusiasm that his administration would focus on business-friendly priorities like renewed tax cuts and deregulation. Many felt Trump’s desire for a healthy stock market would hold aspects of his agenda that are less appealing to investors—namely tariffs, widespread government layoffs, and mass deportations of immigrant workers—in check.

But the president said Thursday that he’s not looking at stocks when he sets policy and blamed “globalists”—a term he used to describe several companies and countries that have supposedly “ripped off” the U.S.— for the sell-off. 

And Treasury Secretary Scott Bessent has rejected this idea of a “Trump put,” a play on options terminology that implies the president would try to intervene to support share prices. Both Trump and Bessent have been much more vocal about the bond market, the key to their pledge of lowering borrowing costs for Americans.

As with stock prices, consumer sentiment surged after the election but has noticeably fallen since. At a conference hosted by Bloomberg in downtown Manhattan Tuesday, Soros Fund Management CEO Dawn Fitzpatrick said she thinks both consumer and business confidence are “falling off a cliff.”

“I would have thought that the markets would have held up better,” said Fitzpatrick, who also serves as CIO, a role formerly occupied at the firm by Bessent from 2011 to 2015. “But I would also not have thought that we would have had the level of frenetic activity out of Washington. And when we look at the headlines over the past 24 hours, they’ve been kind of breathtaking in speed and scale.”

Investors now appear increasingly concerned about downside risk to their portfolios. The VIX, a measure of expected market volatility popularly known as Wall Street’s “fear gauge,” now sits at its highest level since mid-December.

According to Apollo chief economist Torsten Slok, traders are buying call options on the index, which will turn a profit if volatility spikes further, at near-record volumes—a sign of increased hedging by money managers. The same goes for S&P 500 put options, which allow investors to bet on the benchmark index falling. 

Adding to all this uncertainty is questions about what the Federal Reserve will do with interest rates this year. For the time being, the central bank appears poised to stand pat, waiting with everyone else to see how Trump’s policies affect both inflation and employment.

“It’s hard to really read the tea leaves there, but that’s something that we’ll be watching carefully,” John C. Williams, president of the New York Fed, said at the Bloomberg conference Tuesday.

Fed Chair Jerome Powell echoed that sentiment in a speech hosted by the University of Chicago on Friday. Monetary policy is “well-positioned,” he said, whether the central bank is forced to fight another bout of inflation or a rise in unemployment. In a worst-case scenario, it might need to do both.