Trump's First 100 Days: Stocks and Bitcoin Take a Tumble

Since the start of 2025, investors have been feeling the heat. The optimism that greeted the new year has faded, and the stock market is feeling the pinch. US stocks have been lagging behind their European and Chinese counterparts. Bitcoin, which had a wild ride during Trump's inauguration, has also taken a hit, dropping about 17% in the past month. The stock market has been on a rollercoaster ride. The Dow Jones Industrial Average and the S&P 500 have been up and down like a yo-yo. The Nasdaq Composite, which is heavy on tech stocks, has taken the biggest hit, down more than 1% since the start of the year. Investors are worried about inflation and the uncertainty around Trump's trade policies. The VIX, Wall Street's fear gauge, spiked to its highest level this year before calming down. The S&P 500 has closed lower for three straight sessions, and all three major US stock indexes are in the red since Trump took office. Investors are getting nervous. They're moving away from risky assets like stocks and cryptocurrencies and into safer investments like government bonds. The yield on the 10-year US Treasury slid to 4. 3% on Tuesday as investors snapped up bonds, signaling concerns about uncertainty and weaker-than-expected economic growth. Walmart, a company that's often seen as a bellwether for the US economy, spooked investors last week. It signaled slower sales in 2025 than previously expected. This news didn't help the already jittery market.

While US stocks might be struggling, global markets are doing just fine. Europe’s STOXX 600 Index has gained almost 10% this year. In China, equities continue to outperform the US. The release of DeepSeek’s LLM has reignited interest in China tech, while the developments around Ukraine are triggering a surge in performance for European tech companies and companies exposed to potential reconstruction. The Dow and the broader S&P 500 have gained since Trump’s reelection in November and are still slightly in the green since the start of 2025. Yet the S&P 500 posted back-to-back gains of more than 20% in 2023 and 2024, raising questions about whether the bull rally can continue in 2025. Tech stocks, which pushed US indexes higher in 2024, have wavered in recent days. Nvidia (NVDA), Palantir (PLTR) and Tesla (TSLA) were leading the selloff in stocks on Tuesday. Palantir, a star of 2024, has fallen about 30% in the past five days. Tesla shares were down 8% by midday Tuesday, bringing the company’s market value below the $1 trillion mark. Two out of three traders believe the market is overvalued, according to Charles Schwab’s quarterly trader client sentiment survey. Yet bullish traders still outnumber bearish traders 51% to 34%. It’s clear that the majority of traders believe there’s some froth in the market, but on balance they also feel like there’s still more room for the bulls to run. While there is looming uncertainty, some strategists think fundamentals like strong corporate earnings will drive stocks higher. While we continue to expect volatility ahead as investors grapple with the potential impact of Trump’s proposed policies, we believe markets are likely to refocus on fundamentals that should support the equity rally further.

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