There’s an old saying in economics: The stock market isn’t the economy.
However, it can be a good indicator of economic sentiment. And the market this week — the Dow Jones was down 1,497 points over the past five days as of market close yesterday — reflects the dour economic mood of the country as a whole.
Things are uncertain. President Donald Trump campaigned on helping Americans struggling with high inflation but though inflation came down slightly in February, Trump’s trade wars could drive prices up again. Job growth has remained steady, but his efforts to slash the federal workforce could cause hiring to dip. And of course, there’s all those losses in the stock market.
Like the market, the American public remains skeptical of Trump’s economic strategy: A March Reuters/Ipsos poll found that 57 percent of Americans think Trump’s economic policy has been too erratic. Other recent polls similarly show his approval ratings on his handling of the economy tanking.
Increasingly, reports are emerging that find Wall Street is feeling betrayed by Trump’s chaotic economic policies, having hoped that his second term would be a boon for the stock market. Trump certainly gave the markets a lot of attention during his first term, when he frequently touted the record highs the stock market reached under his tenure, appearing to view it as a direct reflection of the strength of his economic policies.
Instead, major US stock indices (which did close higher on Wednesday following the inflation report) are still posting losses this year to date. That has put them behind global stock indices, which as the above chart shows, are down only slightly for the year. Some of those that exclude US stocks have even posted gains so far in 2025, with the MSCI EAFE (which focuses on “developed” markets outside of the US) up nearly 10 percent.
Obviously, the economy is a complicated thing, and its health is controlled by a variety of factors — some, like the most commonly used tools to control inflation, outside of the president’s control.
But the disparate results US-based and foreign stock indices are seeing suggests that the current turmoil in the American economy can’t be blamed on global factors out of anyone’s control. Instead, the policy choices made by Trump and his allies are at fault.
That’s been evident in the movement of the markets, which fell this week in response to Trump’s announcement of new tariffs, and which have continued to respond negatively to lingering uncertainty (at times, it’s been unclear what, exactly, Trump tariff policy is, for example).
Trump can’t snap his fingers and make the economy great again. No world leader has that power, though they might wish otherwise. But he could take steps — including laying out a clear and consistent economic strategy — to get the US stock market more in line with the markets of its closest economic rivals, and to make the economy feel a bit more stable, if not strong.
