Share values and cryptocurrency prices have been buoyant since Trump’s election, but some on Wall Street believe the party could be over soon. Wall Street analysts are worried that the U.S. economy is entering a period of turbulence as stock market enthusiasm collides with uncertainty about Donald Trump's agenda.
Multiple financial experts have warned in recent weeks that the post-election surge in share and cryptocurrency prices, known as a bull market, may soon stumble. Some also sounded alarms about the potential impact of Trump's autocratic and chaotic mercurial governance style, in which markets may be blindsided by sudden policy swings.
Jim Chanos, a hedge fund manager, likewise said: “For good or bad, depending on your politics, we’re back to the chaos presidency.”. He added: "Whatever you might think about the Biden administration, if you were a market participant, you generally didn’t need to check your Twitter feed the first thing in the morning when you woke up just to see what was said. But we’re back to that, and with that, comes probably more volatility.".
The S&P 500, which tracks the value of the country's 500 biggest companies, has been climbing steadily off and on since late 2023 and hit record highs on November 11 and February 19. Meanwhile, the price of Bitcoin soared to a height of $105,000 after Trump's election and has remained above $90,000 since then.
All of which suggests that Wall Street expects great things from a billionaire-friendly president who has pledged to downsize the federal government and slash regulations while centralizing power under himself. But some analysts are worried, both about whether this enthusiasm is sustainable and about whether Trump's policies — particularly his promised tariffs on foreign imports — will dampen the party.
JPMorgan boss Jamie Dimon warned in January that "asset prices are kind of inflated, by any measure", adding: "You need fairly good outcomes to justify those prices.". And while Dimon has broadly supported Trump’s tariffs and budget cuts, others are concerned about the economic impact of laying off thousands of federal employees, and slashing federal contracts.
Other analysts have claimed that the stock market is underestimating the likelihood and impact of Trump's tariffs, which have so far remained more bark than bite. Richard Bernstein also told Politico that the high enthusiasm among investors will make them especially sensitive to any negative developments.
"It’s not like we’re in an environment where people are bearish and the slightest positive thing will cause a bull market. This is the exact opposite," he said. "People are really bulled up, and so [the government are] going to have to tread much more lightly than they think they are.".
