Before he was sworn in as president, Donald Trump made clear that he would treat the stock market as a crucial yardstick of his success in office.
“The world was gloomy before I won — there was no hope,” he wrote on Twitter on Dec. 26, 2016. Since his election, he said, “the market is up 10%.” (It was up, but not that much.)
In the three years since, Trump has obsessed over the daily gyrations of the stock market like no president before him. He trumpeted its relentless rise as a validation of his leadership, his financial acumen and his policies. Disappointing days were the fault of Democrats, the media or the Federal Reserve. Stocks, he warned, would crash if he was impeached or “if anyone but me takes over in 2020.”
Now his bragging rights and doomsday threats have evaporated — along with trillions of dollars in wealth.
Stocks continued their monthlong meltdown Friday, with the Dow Jones industrial average tumbling about 4.5% to below where it stood when Trump was sworn in as president Jan. 20, 2017. The S&P 500 also sank more than 4%, though it remains up — barely — during the Trump presidency.
The implosion — stocks have collapsed about 35% since the coronavirus spread globally last month — is shaping up to be one of the most destructive periods in American financial history. More than $8 trillion in shareholder value has been destroyed. On four occasions in the past month, automatic circuit breakers halted trading to stall dizzying sell-offs. The plunge is the steepest since at least 1928.
The market collapse isn’t Trump’s fault, although some of his decisions may not have helped, including his statements minimizing the danger of the virus. The fast-spreading pandemic has forced countries all over the world to essentially shut down their economies, and that probably would have happened in the United States regardless of who was in the White House.
But the speed and violence of the fall have stunned just about everyone. Only a month ago, on Feb. 19, Trump was in chest-thumping mode. “Highest Stock Market In History, By Far!” he crowed on Twitter.
That day turned out to be the market’s peak.
From the start of his presidency, some of Trump’s policies have seemed tailor-made to catapult the stock market to new heights. His landmark legislative achievement — the $1.5 trillion tax-cut package that he signed into law at the end of 2017 — handed out rich rewards to corporate America. The windfall fattened profits and led to a frenzy of companies buying back their own shares, which propelled stocks still higher.
Investors loved it. Bankers loved it. Corporate executives loved it. The money showered upon them from tax cuts and the seemingly invincible bull market mollified even those who privately grimaced at the president’s pronouncements and social policies.
But nobody loved it like Trump. He has tweeted about the stock market at least 131 times since becoming president. He kept a running tally of stock market records — 135 by his last count, on Dec. 19. He personalized the rally, referring to “my stock market gains.”
By taking credit, over and over, for the stock market’s record run, Trump arguably set himself up to be blamed for its record fall. (Trump has repeatedly insisted that he be measured by the market’s performance starting Nov. 9, 2016, the day after his election, rather than when he took office. By that measure, stock markets are still up on his watch, though not by much.)
So deeply has Trump interwoven his fortunes with those of the markets that plenty of members of the Trump-loathing left have watched markets plunge with a dose of schadenfreude.
“If you politically live by the stock market, you can politically die by the stock market,” said Neera Tanden, president of the Center for American Progress, a liberal think tank in Washington. She said she hoped that, with Trump no longer able to bask in the warmth of an epic market rally, the public will have a clearer view of his deficiencies. But, she added, “I’m not rooting for the market to tank.”
Democrats’ distrust of Trump runs deep. Some have kept their money out of the stock markets, according to a team of economists at the Massachusetts Institute of Technology who studied anonymized data about the stock portfolios for millions of investors.
“People who are more likely to be Republicans, after the 2016 election, were a bit more likely to put money into the stock market, while Democrats do the opposite,” said Antoinette Schoar, an MIT professor.
For a long time, as markets roared, that meant missing out on big profits. Now it’s not looking like such a bad decision.
Even as markets were cratering this month, Trump has clung to the good days.
As he spoke at a White House news conference on the afternoon of March 13, the stock markets staged a 9% rally. It wasn’t enough to recover from the drop the day before, but Trump was so jubilant that he printed out a chart of the day’s market activity, autographed it and sent it to a Fox Business anchor.
“BIGGEST STOCK MARKET RISE IN HISTORY YESTERDAY!” Trump shouted on Twitter the next day. (It was the Dow’s biggest gain in total points but the biggest percentage gain only since 2008.)
Those gains were erased within moments of the opening of markets the next Monday — and Trump, for the first time in his presidency, adopted a more philosophical tone.
The best thing to do for stocks is to contain the coronavirus, he said at a March 16 press briefing. “The market will take care of itself.”