US Stock Markets Under Pressure: Concerns Over Economic Slowdown Under Trump

The initial euphoria over Donald Trump’s re-election has noticeably faded in financial markets. While investors initially hoped for a business-friendly environment with tax cuts and deregulation, concerns about an economic slowdown are now growing. This is reflected in significant stock market losses. On Monday, the S&P 500 fell nearly 3%, the Nasdaq lost 4%, and even major players like Nvidia and Apple saw their shares drop by around 5%.

Tesla was hit particularly hard: the electric car manufacturer’s stock plummeted by 15% and has lost more than half of its value since December. Analysts attribute this decline to weaker sales in key regions and the increasing polarization of Elon Musk, who has closely aligned himself with Trump.

At the same time, the yield on 10-year US Treasury bonds has fallen to 4.22%—a sign that investors expect weaker economic growth. While the official unemployment rate remains low at 4.1%, early indicators such as the Atlanta Fed’s GDP tracker suggest that a recession could occur in the first quarter of 2025.

Consumer behavior is also a cause for concern: companies like Delta Air Lines have lowered their earnings forecasts due to declining domestic demand. Some observers believe this reflects growing economic uncertainty and fears of rising inflation under Trump.

Additionally, political decisions are creating unrest. The planned dismissal of thousands of federal employees and trade measures targeting China and other countries are putting pressure on businesses. Even Washington’s real estate market could be affected by public sector cuts.

Trump himself acknowledged in a Fox News interview that a recession could not be ruled out, but described it as a “transition period.” Investors interpreted this as a sign that the new administration is placing less short-term emphasis on the stock market.

While Trump’s first term was marked by rising markets, a new reality is now emerging: without consumer confidence, keeping the economy on track remains a challenge.