Market Jitters: Why Stocks and Bitcoin Are Struggling Under Trump’s New Term
3 min read
As 2025 unfolds, investors who were once hopeful about a business- and crypto-friendly Trump administration are now facing unexpected market turbulence. With US stocks underperforming compared to European and Chinese markets and Bitcoin experiencing a steep decline, concerns over inflation and policy uncertainty are weighing heavily on Wall Street.
Stocks Slide Amid Economic Uncertainty
On Tuesday, US stocks saw mixed results as investors reacted to a discouraging consumer confidence report. The Conference Board’s consumer confidence index recorded its sharpest monthly drop since August 2021, amplifying fears of rising inflation and slowing economic momentum.
- The Dow Jones Industrial Average closed 0.37% higher at 43,621 after initial fluctuations.
- The S&P 500 dipped 0.47%, while the Nasdaq Composite slid 1.35%, marking its fourth consecutive losing session.
- Since Trump’s inauguration on January 20, 2025, all major US stock indexes have slipped into negative territory, with the Nasdaq losing over 1% year-to-date.
Despite a post-election rally that pushed the S&P 500 to record highs last week, mounting inflation worries and trade policy uncertainty have led to a shift in investor sentiment. CNN’s Fear & Greed Index dropped into extreme fear territory for the first time since December, signaling growing anxiety in financial markets.
Bitcoin’s Steep Decline: What’s Driving the Drop?
Bitcoin, which surged to an all-time high of $106,000 around Trump’s inauguration, has since tumbled 16%, trading at $88,000 on Tuesday. The drop reflects a broader market trend where investors are retreating from riskier assets, including cryptocurrencies, in favor of safer options like US Treasury bonds.
The 10-year US Treasury yield fell to 4.29%, as investors flocked to bonds, reflecting fears of economic instability and slowing growth.
Market Signals: Inflation, Earnings, and Global Trends
Walmart, a key indicator of consumer spending, raised alarms last week by forecasting slower sales growth for 2025, reinforcing concerns about economic uncertainty. Meanwhile, the VIX, Wall Street’s fear gauge, surged to its highest level this year before stabilizing.
While the US market faces volatility, global stocks are thriving:
- Europe’s STOXX 600 Index has climbed nearly 10% year-to-date.
- Chinese equities have significantly outperformed US stocks, fueled by renewed investor confidence in tech innovation and government stimulus measures.
- The release of DeepSeek’s LLM has driven a 35% surge in Chinese tech stocks since January.
- Ongoing developments in Ukraine are propelling European tech stocks higher, particularly firms poised to benefit from potential post-war reconstruction efforts.
Can the Bull Market Survive?
Despite the recent downturn, the Dow and S&P 500 remain slightly up since Trump’s reelection in November. However, after consecutive years of 20%+ gains in 2023 and 2024, market analysts are questioning whether the bullish momentum can continue.
Tech stocks, the backbone of last year’s rally, are now showing weakness:
- Palantir (PLTR) has dropped 30% in five days.
- Tesla (TSLA) plunged 8.4% on Tuesday, pushing its market value below $1 trillion.
- Nvidia (NVDA) and other high-growth tech stocks also contributed to the selloff.
According to Charles Schwab’s trader sentiment survey, two-thirds of traders believe the market is overvalued, yet bullish sentiment (51%) still outweighs bearish sentiment (34%).
What’s Next for Investors?
While market volatility remains a concern, some experts believe strong corporate earnings could help stabilize the market. UBS Global Wealth Management’s chief investment officer, Solita Marcelli, suggests that once investors adjust to Trump’s economic policies, fundamentals may take center stage again, supporting a continued stock rally.
“While we expect market swings as investors assess Trump’s policies, we believe strong corporate earnings and long-term growth potential will sustain the equity market,” Marcelli stated in a note on Tuesday.
Final Thoughts: Navigating Market Volatility
The financial landscape in Trump’s new term is proving to be more unpredictable than many had anticipated. While global markets thrive, US stocks and Bitcoin face headwinds from inflation fears, policy uncertainty, and shifting investor sentiment. As 2025 progresses, traders and investors will need to stay vigilant, balancing risk and opportunity in an ever-evolving economic environment.
Keywords: Trump administration, stock market, Bitcoin crash, inflation concerns, US economy, investment trends, global markets, financial uncertainty, treasury bonds, tech stocks, S&P 500, Nasdaq, Dow Jones, cryptocurrency market, Federal Reserve, trade policy.
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