Trump's 90 Days In Office: Another 25% S&P Crash Ahead?
Have you been keeping an eye on your portfolio lately? Things have become quite interesting since January, and not in the way most investors would have hoped. In the roughly three months since Trump moved back into the White House, the financial markets have already taken quite a beating. Given the current trajectory, the markets could still experience another 25% decline.
Remember how the markets were riding high in January? Well, that party didn't last long. The S&P 500 has tumbled around 15% from its peak of over 6,140 to under 5,300 now. If you're heavy in tech stocks, we feel for you – the Nasdaq has taken an even bigger hit, down a whopping 20% from its highs.
And crypto enthusiasts? Bitcoin has corrected about 20% too. Meanwhile, 10-year government bond yields have fallen from 4.8% in January to 4.3% now, which typically signals investors fleeing to safer options.
Speaking of safe havens, gold has been shining bright – up roughly 25% so far this year. Classic flight to safety, right?
So what got us here? It all kicked off when the new administration started imposing those tariffs on trading partners. Remember those campaign promises about getting tough on trade? Well, they're becoming reality, and the trade war with China has escalated significantly.
Let's break this down in simple terms. When you slap higher tariffs on imports, you're basically taking cheaper goods out of the market. What happens next? Prices go up. That's just basic economics.
And rising prices could mean inflation spikes again. If that happens, the Fed might have to put those interest rate cuts we've all been hoping for on hold. Tricky situation, right?
But here's the real worry – economic growth slowing down, or worse, sliding into a recession. And if you think the market damage in Trump's first three months is bad, just wait until recession fears really take hold.
Let's get real about what markets do during economic stress. The S&P 500 has a track record of serious crashes:
During the dot-com bubble, it plunged 47%. The Great Financial Crisis? Even worse – down 55%. The COVID crash knocked it down 34%. Even the 2022 drawdown saw a 20% drop.
Those aren't small numbers. They represent trillions in market value vanishing.
Here's where things get really interesting. We're already down 15% on the S&P 500, but if we use those previous market crashes as our guide, we could be in for a much steeper decline.
Consider this: we're currently sitting at about a 15% drawdown from the peak. But the average of those four major market crashes we mentioned earlier is about 39%. That suggests we could potentially see another 24% decline from current levels if a full-blown recession materializes.
In real numbers, that would take the S&P 500 down from its current level around 5,300 to approximately 4,030 – erasing nearly two years of gains.
What's particularly concerning is that we've already seen this 15% decline without an official recession. Historically, the biggest market drops come when economic reality catches up with market sentiment.
So what's your move? Whatever you do, buckle up – if history is any guide, we might be in for a much bumpier ride than what we've seen so far. Surely, you can talk to professional financial advisors. Trefis works with Empirical Asset Management – a Boston area wealth manager, whose asset allocation strategies yielded positive returns even during the 2008/2009 timeframe, when the S&P lost more than 40%.
Empirical has incorporated the Trefis HQ Portfolio in its asset allocation framework to provide clients better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.
While investors have their fingers crossed for a soft landing by the U.S. economy, how bad can things get if there is another recession? See the last six market crashes compared.
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an hour ago
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Environmental groups and the Miccosukee Tribe have asked Williams to issue a preliminary injunction to halt operations and further construction. The suit claims the project threatens environmentally sensitive wetlands that are home to protected plants and animals and would reverse billions of dollars' worth of environmental restoration. ▶ Read more about 'Alligator Alcatraz' Update: Date: 2025-08-07 18:56:51 Title: EPA cancels $7 billion Biden-era grant program to boost solar energy Content: The Environmental Protection Agency on Thursday terminated a $7 billion grant program that was intended to help pay for residential solar projects for more than 900,000 lower-income U.S. households. It's the latest Trump administration move hindering the nation's shift to cleaner energy. The funding, part of Democratic President Joe Biden's Solar for All program, was awarded to 60 recipients including states, tribes and regions for investments such as rooftop solar and community solar gardens. Solar, a renewable energy, is widely regarded as a way to introduce cleaner power onto the electrical grid and lower energy bills for American consumers. ▶ Read more about residential solar Update: Date: 2025-08-07 18:27:19 Title: Ralph Lauren warns that tariffs could squeeze its profit margin Content: Shares of Ralph Lauren fell more than 7% on Thursday as the maker of iconic polo shirts, sport coats and other luxury clothing said that tariffs and general uncertainty could affect consumer sentiment later this year. 'The big unknown sitting here today is the price sensitivity and how the consumer reacts to the broader pricing environment and how sensitive that consumer is,' Ralph Lauren's CEO Patrice Louvet told analysts on Thursday. 'That's what we're watching very closely as we head into the second half.' The cautious comments came after the clothing maker posted strong sales in its fiscal first quarter — and upgraded its sales outlook. In May, the New York-based company had said that it would raise prices this fall because of tariffs. Correction: This post has been updated to reflect that Ralph Lauren said tariffs and general uncertainty could impact consumer sentiment. The company did not say tariff costs could hurt profit margins, as was previously written. Update: Date: 2025-08-07 17:48:39 Title: UN chief welcomes all efforts to end the war in Ukraine that respect its territorial integrity Content: U.N. deputy spokesman Farhan Haq, asked for Secretary-General Antonio Guterres' reaction to the announcement of a meeting between U.S. President Donald Trump and Russian President Vladimir Putin, said: 'We'll have to see what happens.' 'But clearly, we do welcome all efforts that are that are intended to bring about peace in Ukraine in line with the U.N. Charter, international law and the resolutions of the General Assembly and Security Council,' Haq said. The U.N. Charter requires all 193 U.N. member states, including Russia and Ukraine, to refrain from using force against any other nation and to respect their sovereignty and territorial integrity. U.N. resolutions call for Russia, which invaded Ukraine in February 2022, to withdraw all its forces from the country. Update: Date: 2025-08-07 17:46:33 Title: Researchers laid off and science shelved as battle between Harvard and Trump administration continues Content: The loss of an estimated $2.6 billion in federal funding at Harvard has meant that some of the world's most prominent scientists and academics are laying off young researchers. They are shelving years or even decades of research, into everything from opioid addiction to cancer. The funding cuts are part of a monthslong battle that the Trump administration has waged against some the country's top universities including Columbia, Brown and Northwestern. The administration has taken a particularly aggressive stance against Harvard, freezing funding after the country's oldest university rejected a series of government demands issued by a federal antisemitism task force. And despite Harvard's lawsuits against the administration, and settlement talks between the warring parties, researchers are confronting the fact that some of their work may never resume. Harvard University professor Alberto Ascherio has collaborated with the U.S. government to collect blood samples taken from soldiers over the course of two decades for his groundbreaking research to identify the cause of multiple sclerosis and other neurodegenerative diseases. Now that work is on hold indefinitely. 'It's like we have been creating a state-of-the-art telescope to explore the universe, and now we don't have money to launch it,' said Ascherio. 'We built everything and now we are ready to use it to make a new discovery that could impact millions of people in the world and then, 'Poof. You're being cut off.'' Update: Date: 2025-08-07 17:31:59 Title: United Nations chief calls US tariffs `disheartening news' Content: Secretary-General Antonio Guterres believes all trade wars 'are ruinous and need to be avoided,' U.N. deputy spokesman Farhan Haq said. The secretary-general stresses to all governments that at a time of trade wars 'measures need to be taken to protect the poorest and most vulnerable sectors of society who will certainly suffer as a result of the higher prices,' Haq said. Update: Date: 2025-08-07 17:26:33 Title: Brazil president and India prime minister call to discuss tariffs Content: Brazil's President Luiz Inácio Lula da Silva spoke with Indian Prime Minister Narendra Modi on Thursday about unilateral U.S. tariffs, according to a statement from Brazil's presidency. The call came as new tariffs imposed by Trump took effect. On Wednesday, Trump said he would be adding a 25% tariff on Indian imports tied to Russian oil starting in 21 days, raising the total to 50%. A similar rate was applied to Brazilian exports last week, which went into effect on Wednesday — though exemptions included aircraft parts, aluminum, tin and wood pulp. Lula and Modi reaffirmed their goal to boost bilateral trade to more than $20 billion by 2030 and agreed to expand the MERCOSUR-India trade agreement. Lula confirmed plans to visit India in early 2026, with Vice President Geraldo Alckmin visiting in October. Update: Date: 2025-08-07 16:53:35 Title: Americans will see an average tax of 18.6% for imported goods, Yale's Budget Lab says Content: As Trump's tariffs take effect, Americans will see an average tax of 18.6% for imported products, the highest rate since 1933, according to the Budget Lab at Yale, a non-partisan policy research center. The Budget Lab estimated prices will increase 1.8% in the short term as a result of the trade war the U.S. waged this year. That's the equivalent of a $2,400 loss of income per U.S. household, the group said. The analysis, which is based on the effects of all U.S. tariffs and foreign retaliation implemented in 2025 and through Wednesday, including the 50% tariff rate on India. The analysis assumes the Federal Reserve doesn't react to tariffs and so the real income adjustment comes primarily through prices rather than nominal incomes. If the Federal Reserve reacted, the adjustment could in part come in the form of lower nominal incomes, the group said. Update: Date: 2025-08-07 16:26:12 Title: 'Speedway Slammer' nickname for Indiana detention partnership sparks a backlash Content: Department of Homeland Security Secretary Kristi Noem is promoting a deal with the state of Indiana to open 1,000 detention beds for immigrants facing deportation. DHS posted an image of an IndyCar-style race car emblazoned with 'ICE' and the number 5, rolling past a barbed-wire prison wall. 'If you are in America illegally, you could find yourself in Indiana's Speedway Slammer,' Noem said. Speedway, which hosts the Indianapolis 500 — put out a statement saying the town wasn't involved, and IndyCar asked that its intellectual property 'not be utilized moving forward in relation to this matter.' No. 5 is used by IndyCar driver Pato O'Ward, the only Mexican driver in the series. DHS officials said they won't stop promoting the nickname. Update: Date: 2025-08-07 16:25:21 Title: Vance to meet with foreign secretary during UK trip Content: On Friday, the White House says Vance will meet with U.K. Foreign Secretary David Lammy at Chevening House, a stately home in Kent, south of London. The White House hasn't detailed what's on the agenda. But the meeting comes as the United Kingdom tries to come to favorable terms for steel and aluminum exports to the U.S., as the two sides work out details of a broader trade deal announced at the end of June. Russia's invasion of Ukraine and the Israel-Hamas war in Gaza are also likely to be on the agenda amid debates between Washington and London about the best way to end those conflicts. Update: Date: 2025-08-07 16:17:48 Title: The leaders of Armenia and Azerbaijan will meet at the White House on Friday Content: Trump is scheduled to meet Friday with Armenian Prime Minister Nikol Pashinyan and Azerbaijani President Ilham Aliyev, according to a U.S. official who was not authorized to speak publicly and spoke on condition of anonymity. The two nations have been working toward a peace treaty in their almost four decades of conflict, and a possible peace deal is on the table, according to the official. Armenia and Azerbaijan have been locked in a bitter conflict over territory since the early 1990s, when ethnic Armenian forces took control over the Karabakh province and nearby territories. Update: Date: 2025-08-07 16:03:21 Title: Senior FBI official who resisted Trump demands is ousted Content: A senior FBI official who served as acting director in the first weeks of the Trump administration and resisted demands to turn over the names of agents who participated in the Jan. 6, 2021, investigations is being forced out of the bureau, according to two people familiar with the matter who spoke to The Associated Press on Thursday. The circumstances of Brian Driscoll's ouster were not immediately clear, but his final day is Friday, said the people, who were not authorized to discuss the personnel move by name and spoke on the condition of anonymity. Update: Date: 2025-08-07 15:58:47 Title: Indiana Republicans mum on Vance redistricting talk Content: Indiana Gov. Mike Braun told reporters that Republican leaders discussed a 'wide array of topics' in a private meeting with JD Vance Thursday morning. 'We listened,' he said while walking through the statehouse, and confirmed redistricting was discussed, according to a video posted by a reporter with Fox 59 in Indianapolis. Indiana House Speaker Todd Huston and Senate President Pro Tem Rodric Bray, both Republicans, declined to comment to reporters, and in a post on X, Braun's office did not mention redistricting. 'It was great to meet with @VP Vance today. We discussed a number of issues, and I was pleased to highlight some of the great things happening in Indiana,' the post said. Update: Date: 2025-08-07 15:45:06 Title: Alcohol trade groups ask for 'toasts not tariffs' Content: A coalition of 57 U.S. associations and state guilds that represent businesses that make, import, distribute and sell alcohol, called the 'Toasts not Tariffs Coalition' asked Trump to keep the trade in U.S. and European Union spirits and wines free of reciprocal tariffs. The group estimates that Trump's 15% tariff on U.S. imports of EU wine and spirits could result in more than 25,000 American job losses and nearly $2 billion in lost sales. 'Many U.S. and EU spirits are recognized as 'distinctive products' and can only be made in their designated countries — Bourbon and Tennessee Whiskey in the U.S., and Cognac in France,' the group wrote. 'Similarly, wine is linked to its place of origin through American Viticultural Areas, appellations of origin or geographical indications. Consequently, production of these products cannot simply be relocated to circumvent tariffs.' Update: Date: 2025-08-07 15:42:05 Title: Trump holding closed-door meeting as complaints about RFK Jr.'s mRNA vaccine announcement loom Content: Trump said he would discuss a controversial decision by his Health and Human Services Secretary to cancel $500 million worth of mRNA vaccine development research during a noon meeting on Wednesday. A key Kennedy adviser, Dr. Robert Malone, is urging 'Make America Healthy Again' supporters to use their social media channels to encourage Trump to uphold the cancellations. But U.S. Sen. Bill Cassidy, R-La., among others, blasted Kennedy's decision to end the vaccine research. 'It is unfortunate that the Secretary just canceled a half a billion worth of work, wasting the money which is already invested,' Cassidy wrote on X. Update: Date: 2025-08-07 15:40:06 Title: 10 ways Trump has boosted the Christian right Content: Trump has repeatedly delivered for the bedrock of his Republican support. While he has made overtures to other religious groups including Jews and Muslims, conservative Christians are among his highest-profile surrogates and appointees, and their impact is expanding. 'We're bringing back religion in our country,' Trump contended on the National Day of Prayer in May. Progressive Christian critics say he's eroding the separation of church and state, and advancing an ideology that Christian nationalists should dominate government. 'A president with a true Christian agenda would be most concerned with uplifting those in our country who have been cast aside,' said the Rev. Shannon Fleck. 'Those most vulnerable among us are not these manipulators of Christianity that are seeking nothing but power.' ▶ Read more to see 10 ways Trump has delivered for conservative Christians
