No Pain, No Gain? Trump Adopts New Zen-Like Approach to Stock Market Swings

In President Donald Trump‘s first term, he often defined his presidency by the stock market’s performance, using it as a barometer of economic success. But as market volatility surges and investor concerns that the president’s policies are careening the economy toward a recession this time around, Trump is adopting a new stance—one that emphasizes long-term resilience over immediate gains.

“It takes a little time,” he told Fox News in a weekend interview, responding to the sharp selloff that has rattled Wall Street since his return to office. “We’re bringing wealth back to America. That’s a big thing.”

So far at least, Wall Street isn’t buying what the president is selling.

Since Trump’s inauguration, the stock market has swung wildly, reacting to a constant drumbeat of on-again, off-again tariffs, federal layoffs and spending freezes. The Economic Policy Uncertainty Index, a measure of instability in government decision-making, spiked to 588.83 on March 9, reaching levels not seen since the height of the pandemic.

On Monday, the S&P 500 fell 2.7 percent, bringing its total decline to nearly 9 percent from its all-time high, with seven swings of more than 1 percent in the past eight days. The Dow Jones Industrial Average also took a hit, dropping 2.1 percent, while the tech-heavy Nasdaq plunged 4 percent. Tuesday morning, stocks plummeted again as the White House announced new tariffs on Canada.

And now, as layoffs on the federal government rise, business confidence falls, and economic forecasts weaken, Wall Street—long used to Trump’s market-friendly rhetoric—is being told by the president to embrace the volatility as part of a longer-term strategy.

“I hate to predict things like that. There is a period of transition, because what we’re doing is very big,” Trump said.

What, exactly, he is doing remains uncertain. And if there is one thing investors hate, it’s uncertainty.

A Political Maneuver or an Economic Shift?

Experts consulted by Newsweek view this shift as a White House caught between ideological ambitions and market realities. Lawrence J. White, an economics professor at NYU’s Stern School of Business, sees Trump’s statements as a strategic effort to shape a narrative rather than a genuine policy shift.

“The stock market has generally had an unfavorable opinion of Mr. Trump’s tariffs,” White said. “Investors believe these measures will negatively impact corporate profits. Many American companies will suffer, and then there’s the issue of retaliatory tariffs from other countries—something Mr. Trump doesn’t seem to have fully considered.”

Historically, Trump has focused on immediate action, often promising drastic changes on “day one.” But with economic concerns mounting, the administration is now promoting patience.

“I don’t believe his recent statements reflect a genuine change in his approach,” White added. “I see them as an attempt to mitigate market concerns and buy time in hopes that conditions improve.”

Economist Joe Foudy, another professor at NYU Stern, views Trump’s latest messaging as an attempt to get ahead of investor anxiety before sentiment deteriorates further.

“This is a political recognition,” Foudy told Newsweek. “If the stock market responds negatively or if we see weaker economic data, Trump needs to get ahead of the narrative. By framing short-term economic downturns as necessary for long-term gains, he is managing expectations.”

But that uncertainty — and the president’s tendency to change his mind on a dime — is what worries investors the most, with tariffs one of the biggest unknowns.

“His unpredictability may help him in negotiations with other countries, but it creates significant uncertainty for businesses and investors,” Foudy adds. “If uncertainty persists, businesses could start delaying investment and hiring, which is when you really start to see economic slowdown.”

How Long Does the Honeymoon Last?

New presidents often benefit from a political “honeymoon period,” during which voters will blame economic discomfort on their predecessors. Former President Obama did not take political heat for the cratering stock market that he inherited in 2009, nor was former President Bush blamed for the dot-com bubble that had burst just before he was sworn in.

But inflation and high grocery prices were central to Trump’s 2024 campaign and victory, and they remain top concerns for voters. The longer these issues persist, the harder it will be for Trump to deflect responsibility.

“The honeymoon period typically lasts three to four months,” White said. “By early summer, if there haven’t been noticeable changes—such as a decline in the price of eggs or gas—public patience may wear thin.”

Gas prices, in particular, are highly salient with voters.

“Every driver sees them daily when they pass gas stations,” White said. “If Mr. Trump were to help broker ceasefires in the Middle East or Ukraine, that could have a beneficial effect on oil prices. If that happens, I have no doubt he will take credit for lowering gas prices.”

Even with external factors driving costs, Trump has positioned himself as a problem-solver on inflation, but with supply chain disruptions from tariffs and labor shortages from deportations, the administration is running out of quick fixes. Foudy warns that inflation perception often doesn’t align with broader economic indicators.

“When people see high prices at the grocery store, they blame whoever is in office,” he said. “Even if external factors like bird flu impact food costs, people still tie those costs to the administration.”

White pointed out that, historically, markets can tolerate uncertainty for only so long before they demand clarity.

“We’ve already seen a significant negative reaction,” White said. “At some point, the market will stabilize because investors will have already priced in Trump’s policies. However, if additional unpredictable or extreme measures emerge, or if foreign governments retaliate, the market could take another hit.”

The administration’s push to shrink the federal government, led by billionaire Elon Musk and his DOGE initiative, is also leaving hundreds of thousands of federal workers and contractors jobless just as overall hiring slows down. February’s jobs numbers showed a labor market starting, ever so slightly, to contract. This could trigger a chain reaction: job losses or fears of layoffs would curb consumer spending, forcing businesses to cut costs, leading to more layoffs and further spending cuts.

The upshot of that cycle would normally be that it would add an incentive for the Fed to cut interest rates, thus making borrowing cheaper and helping to unfreeze the housing market. But the tariffs and multiplying trade wars are making that prospect more complicated.

“Normally, the Federal Reserve would lower interest rates to stabilize the economy. But if tariffs drive up prices, policymakers may hesitate, fearing rate cuts could fuel inflation,” White, the NYU professor, added.

‘This is Trump’s Economy’

Economic forecasts are darkening, with some analysts predicting the U.S. economy could actually contract in the first quarter. Many are scaling back growth projections, citing tariffs, job losses, and labor shortages as key risks.

White said that while a full-blown recession remains far from certain, the risks are mounting by the day.

“I don’t expect a total stock market collapse like what we saw between 1929 and 1933,” White said. “However, we’ve already seen a significant negative reaction.”

Foudy, echoing that sentiment, emphasized that recession fears stem more from policy uncertainty than from any fundamental economic collapse.

“Markets, by their nature, are forward-looking,” he said. “They were initially excited about Trump’s return, anticipating deregulation and tax cuts. Now that he’s in office, they’re weighing the uncertainty surrounding his policies.”

“The optics and policy shifts make this Trump’s economy now,” Foudy said.