A Wary Market, Trump’s Trade Strategy & The Best Investment Advice Ever

The Money Wise guys return this week to analyze another rough stretch for the markets, with the Dow falling 1,114 points (3.1%), the S&P 500 losing 131 points (2.3%), and the NASDAQ dropping 442 points (2.4%). Year-to-date, the numbers continue to slide, with the Dow now down 2.5%, the S&P 500 down 4.1%, and the NASDAQ sinking 8.1%. The discussion opens with a thought-provoking quote from a JP Morgan analyst, emphasizing that while politics may dominate headlines, the stock market operates independently—driven by earnings, growth, liquidity, and investor confidence. Despite market consensus initially expecting a balance between inflationary and pro-growth policies, investors appear wary of the Trump administration’s aggressive stance in its first 50 days, particularly on trade and tariffs.

The conversation then pivots to Trump's long-held views on trade, dating back to interviews from the 1980s, and how his current policies reflect a long-standing belief that the U.S. has been taken advantage of by its trading partners. While tariffs and trade battles may cause short-term economic pain and potentially slow growth, the team notes that the odds of a full recession remain below 50%. Additionally, they point out that the Federal Reserve has tools at its disposal—such as pausing quantitative tightening or cutting interest rates—to offset economic pressure if needed. The Money Wise guys speculate that Trump’s aggressive trade stance might also serve as a strategic push to force the Fed’s hand on rate cuts, especially as inflation pressures tied to housing remain a key concern. With producer and consumer price numbers improving, the message was clear: investors may need to endure short-term volatility for the potential of longer-term market strength.

A Wary Market 

The team discusses how the market remains wary of Trump’s aggressive trade policies, particularly tariffs on key trading partners, which have fueled volatility and investor uncertainty. While some fear these measures could slow economic growth, others see them as necessary to correct trade imbalances. They also note how negative media coverage and escalating tensions have amplified fear-driven selloffs, leading to market corrections that don’t always align with economic fundamentals. The key takeaway? Investors should stay focused on long-term strategies rather than reacting emotionally to short-term fluctuations.

In the second hour, the Money Wise guys share The Best Investment Advice Ever . You don’t want to miss the details! Tune in for the full discussion on your favorite podcast provider or at davidsoncap.com, where you can also learn more about the Money Wise guys or take advantage of a portfolio review and analysis with Davidson Capital Management.