Bumpy road ahead for Trump if stock market turbulence persists in 2025

The excitement caused by Trump’s win caused stock and crypto markets to hit all-time highs. However, his policies have brought fear to the markets. Some people on Wall Street are now warning that the good times won’t last forever.

Trump is, by default, a businessman. That is what he prides himself on. Therefore, he is determined to help businesses and customers. He likes to point to market highs as proof of his success as president of the United States.

If the stock market goes down, it could hurt his image as a president who supports growth. It could also shake his administration’s economic plans if they have to deal with the consequences.

‘Uncertainty is rising’: Stock market turbulence could spell trouble for Trump https://t.co/PxPgrGJlhf

— POLITICO (@politico) February 24, 2025

Inflation jumped more than expected in January.  This means that the Federal Reserve is not likely to lower interest rates any time soon, which is bad news for traders in stocks and crypto.

According to the CEO of J.P. Morgan Asset Management and Chief Global Strategist David Kelly, the economy will suffer because Trump’s plans are not still clear. 

Rich Bernstein, chief executive officer of Richard Bernstein Advisors, which oversees more than $16 billion in assets, said, “Uncertainty is rising, but individual investors are completely certain that they know what the outcome is going to be […] That’s crazy.”

Can we put it all on Trump? Of course not. The markets had two great years in a row, thanks to a mix of huge amounts of stimulus money, unbridled excitement about AI, and a huge interest rate cut by the Federal Reserve last year. However, growing worry about a market that is too expensive now means that the White House might have problems.

 U.S. stocks volatility will be crazier in many ways – Analysts warn

A big worry in the markets is that investors are putting all of their money into a small group of high-flying tech stocks, which are known as the “Magnificent Seven.” These stocks include Nvidia, Meta, and Tesla. For years, those equities have done better than expected because investors think they will become the big names in AI in the future. But their future paths are less clear now.

When Chinese startup DeepSeek released its cheap AI last month, investors quickly sold off those and other major tech stocks. They did this because they realized that AI control might not be as expensive as they first thought. It probably won’t be the last time something spooks investors, either. 

Traders at Bank of America say that the biggest U.S. stocks will go up and down more often and in crazier ways in 2025. As a measure of how unstable stocks are, they said that “fragility” is on track to reach a 30-year high in 2025.

Jamie Dimon, CEO of JPMorgan Chase, and other leaders have said that investors are putting a lot of money into stocks that are overvalued. Companies like GameStop, whose stock prices tend to rise because of investor excitement, are a danger. 

However, Hal Lambert, a Republican donor and the founder of the investment management company Point Bridge Capital, said that Elon Musk’s campaign to cut costs, the expected extension of the 2017 tax cuts, and lower oil prices will all be very good for the economy in the coming years. He also said that U.S. stock buyers aren’t leaving the country just yet.

Lambert said, “People aren’t going to sit around and hold money markets, and they’re not going to sit around and buy three [or] four percent Treasuries […] They’re going to keep investing in the equity markets.”

In fact, Most Wall Street banks and research shops still believe investors are in for a generally positive 2025, as do everyday buyers themselves. More than half of consumers are expecting stocks to increase over the course of 2025, according to the Conference Board.

Most analysts still believe that Trump’s plans for tariffs and a crackdown on immigration, along with the speed at which he is changing policy, could shake up the markets by making inflation worse and creating more uncertainty. 

The S&P records an all-time 

Meanwhile, investors aren’t really slowing down. The S&P 500, which is the most important measure for U.S. stocks, went up by 0.2% last week. The Dow Jones Industrial Average picked up 71 points, or 0.2%, while the Nasdaq composite inched up by 0.1%.

Microsoft was the main driving force for the S&P 500. It went up 1.3% after saying it had made what it calls the “world’s first quantum processing unit.” This could help make computers much more powerful. 

Even though the gain was pretty small, Microsoft’s sheer size means that its stock has a huge effect on the S&P 500 and other averages.

The market also went up because Analog Devices went up 9.7%. The semiconductor company made more money in the most recent quarter than analysts had predicted. In addition, Elon Musk’s Tesla rose 1.8%.

Tesla climbed after another electric-vehicle business, Nikola, plunged 39.1% following its filing for Chapter 11 bankruptcy protection. The company that makes electric trucks said it would try to sell off its gear and shut down.

Is the Crypto market safe?

Crypto has gone through the roof since election day. Kelly from J.P. Morgan said that the explosion of the already-speculative market makes it even more likely that people will sell because there aren’t enough factors to support the prices of some tokens.

Kelly said, “The crypto industry has got many friends in Congress and the administration. And that may help it for a bit, but in the end, it’s not worth anything […] It is priced purely on the greater fool theory, and admittedly, there’s no shortage of great fools in the world.”

Billionaire Paul Singer, who runs the hedge fund Elliott Management, told investors that the White House’s plan to be friendly to crypto is quickly causing a market bubble. In addition, Musk’s agenda on auditing gold made the crypto industry point out that it is more transparent.

However, the risks cannot be overlooked. In 2025, the industry has seen an unwanted trend of scams stemming from within governments as well. 

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