- Trump no longer appears to be tracking the success of his presidency through the lens of the stock market.
- The president’s persistence with tariffs has tanked equities in recent days.
- His team has instead suggested it’s eyeing the 10-year Treasury yield as a scorecard.
President Donald Trump isn’t flinching from his sweeping tariff policy in the face of a brutal stock sell-off that has investors fleeing to safe havens this week.
The president plowed ahead with his plan to levy tariffs on goods from Canada, Mexico, and China on Tuesday. The S&P 500 extended a decline that began on Monday when Trump announced there was no last-minute deal coming to avert the tariffs. The benchmark index fell as much as 2%, completely erasing its post-election gains. The Nasdaq 100, meanwhile, has entered a correction, down 10% from its most recent peak.
During Trump’s first term, such a sell-off would be cause for alarm. After all, the president frequently cited a strong equity market as proof his presidency was going well. He boasted about taking stocks to a “different planet,” and regularly posted about the market being up “massively.”
But Trump and his team are sending a message to markets that they’re OK the fallout in stocks for now. They have a new focus: the 10-year Treasury yield, which has tumbled lately.
In February, Treasury Secretary Scott Bessent pointed to the 10-year yield as a barometer on the president’s radar, emphasizing the focus on borrowing costs for Americans, which are often tied to government bond yields. He reiterated that view on Tuesday.
"Over the medium term, which is what we're focused on, it's a focus on Main Street," he said to Fox News. "Wall Street's done great, Wall Street can continue to do fine, but we have a focus on small business and consumers."
"He and I are focused on the 10-year Treasury, and what is the yield of that," Bessent said of Trump. "He wants lower rates."
The yield on the 10-year bond slid four basis points on Tuesday as concerns about tariffs' impact on economic growth overshadowed fears that a trade war would lead to higher inflation. It has now fallen 35 basis points in the last 10 days.
The rally in bond prices, which move inversely to yields, means Treasurys have now outperformed stocks since the election, according to Bloomberg data.
The president's moves have also challenged the views of Wall Street forecasters, who predicted he could step in if markets became too volatile.
"On election day S&P 500 closed at 5,783; we say this is first strike price of Trump put, below which 'Stocks Down Under Trump' headlines begin, below which investors currently long risk would very much expect and need some verbal support for markets from policymakers," Bank of America strategists wrote last week before tariffs sparked the latest stock rout.
On Truth Social, the president's recent posts have revolved largely around things like tariffs, his immigration policy, and progress on a peace deal between Russia and Ukraine, with no mention of the stock market.
In what perhaps is the best example of how much validation Trump derived from the stock market, in 2020 he sent the late Fox News host Lou Dobbs an autographed chart of the Dow Jones Industrial Average. The chart showed the index's nearly 2,000-point rise the day Trump declared COVID-19 a national emergency.
But the president has been quiet about the stock market lately, saying little to boost investors' mood despite stocks trading lower than when he won the election in November.
Trump's team did not respond to a request for comment from Business Insider.