Has Trump killed the Trump trade?

We’re learning a lot about the Trump administration 2.0, it’s going to be hard to bed down, it has a nationalistic principle like never before and unlike the first administration thought bubbles will turn into action rightly or wrongly as all checks and balances now don’t exist.

What’s also different between Trump 1.0 and Trump 2.0 is using The US equity markets as a benchmark for performance.

It’s been fascinating to see just how silent on the markets the president has become, for example in his first term it was his favourite thing to talk about on social media and there’s good reason for that. From November 6 2016 to the following February in 2017 the S&P 500 climbed 13 percent and closed out the full year with an impressive 20% gain.

If we take the same dates this time around: November 5 2024 to this February 2025 it’s a completely different story up the S&P 500 is up just on 2% (and has fallen into the red if we include March trading) and that’s despite the fact that in the first several weeks after the November election markets were on tear.

You also need to compare the S&P to difference peers across the world – look at Europe, where markets have surged, China markets have also bounced even the Australian market has made records.

There have been some interesting deep dives into this situation over the last few weeks, here are some stark stats that highlight that this time around Trump might not care about the markets as he once did.

In his first term, Trump posted about the stock market 156 times. Since the start of 2024, he’s only mentioned it once.

The political messaging has also changed, in his first term he constantly used positive economic developments for example: lower unemployment (he used terms ‘lowest ever seen’ however this was not factually correct), a surging stock markets, infrastructure spending in key states, manufacturing booming on his watch – all where used constantly to reconfirm that he was the difference.

In his second term this has evaporated – messaging is focused on the debt ceiling, government spending and the task of DOGE, tariffs and nationalising everything.

Now that’s not to say that he won’t return to the good old days of market-led commentary that we traders had learned to love. But it there is no denying that the difference striking

It also reenforces that the Trump trades that have now fizzed out may have more to lose.
Just look at the reactions to the Trump trade over the past 10 days – market sentiment has soured, the narrative around the U.S. economy has turned dark and there is limited bright news coming.

Now market “vibes” shouldn’t matter, they undeniably do.

Again look at what was happening a mere 6 weeks ago just before Trump’s inauguration, The proposed tariffs were viewed as inflationary but potentially beneficial for domestic manufacturing. Well that narrative has now flipped – The prevailing thought is that they’re seen as harmful to growth, with early inflationary effects likely stemming from importers rushing orders to avoid price hikes. Similarly, efforts to rein in federal spending, once praised as fiscal discipline, are now seen as a potential drag on economic momentum.

Then we just have to look at recent data: Retail sales posted their steepest decline in nearly two years, consumer confidence saw its sharpest drop in four years, and optimism among small businesses appears to have peaked.

Getting back to the statistics that matter have a look at Citi index’s surprise index – the U.S. data is now consistently missing Wall Street forecasts, while Europe’s economy continues to outperform.

The initial post-election reaction where based on several pillars ‘America First’—higher growth, higher inflation, higher interest rates, digital and a stronger dollar.” One by one, those assumptions are crumbling.

Just look at Bitcoin down 26% from its January high. U.S. stocks have dropped 4.5% from their recent peak—not even a technical pull back, but a sharp contrast to the relative strength in European and some Asian market markets.

Its not just the Trump trade that is feeling the difference have a look at the impact the new administration is having on Tesla. Being the face of DOGE and the President’s closest alley has downsides. Telsa is currently facing declining sales, especially in Europe and other zones that see Musk as a root cause for current issues. Now increased competition is a factor (have a look as just how well BYD is doing), Musk’s aggressive cost-cutting and controversial political moves aren’t helping. Tesla shares have plunged 40% since mid-December.

A Trump trade that is thriving – the Russian Ruble, up nearly 30% against the dollar this year with no sign of slowing down. Take that as you will.

Ultimately sentiment is always in a state of flux as we all know, but there is a telling trend in the new administration that is clearly a drag for the Trump trades as we have known them over the past periods. The question will be – can the president revive them, or have they officially been killed off?

The president’s approval rating might be the answer to that telling question.