Since Trump took office, stocks are down and bitcoin has plunged. What’s going on?

Investors entered the New Year cheerful about the prospects of a business- and crypto-friendly Trump administration. Yet two months into 2025, US stocks have lagged Europe and Chinese stocks, bitcoin is sliding and concerns about inflation are mounting.

US stocks slid Tuesday as investors digested a poor outlook from a consumer confidence survey that showed heightened concern about inflation. The Conference Board’s consumer confidence index saw its largest monthly decline since August 2021.

The Dow wavered Tuesday morning, sliding 0.2% after opening higher. The benchmark S&P 500 was down by around 0.75% by midday and the Nasdaq Composite fell 1.5%.

US markets are fretting as signs of lingering inflation are on the rise and uncertainty around President Donald Trump’s trade and tariff policy persists. Investor sentiment on Tuesday moved into extreme fear territory for the first time since December, according to CNN’s Fear & Greed Index.

The VIX, Wall Street’s fear gauge, surged 10% on Tuesday to its highest level this year. The S&P 500 has closed lower three sessions in a row, and all three major US stock indexes are in the red since Trump took office on January 20. The tech-heavy Nasdaq is down almost 2% since the start of 2025.

As investors brace for uncertainty, they are likely moving away from stocks into safer assets like government bonds and dumping risky assets like cryptocurrencies: Bitcoin, which surged as high as $106,000 around Trump’s inauguration, is down about 17% in the past month, trading around $87,000 on Tuesday.

The yield on the 10-year US Treasury slid to 4.3% on Tuesday as investors snapped up bonds, signaling concerns about uncertainty and weaker-than-expected economic growth.

Walmart, a bellwether for the US economy, spooked investors last week after it signaled slower sales in 2025 than previously expected.

While US stocks might be stretched, global markets are shining. Europe’s STOXX 600 Index has gained almost 10% this year. In China, equities continue to outperform the US.

“The release of DeepSeek’s LLM has reignited interest in China tech (now up over 35% from its January low), while the developments around Ukraine are triggering a surge in performance for European tech companies and companies exposed to potential reconstruction,” analysts at Goldman Sachs said in a February 25 note.

Testing the bull market

The Dow and the broader S&P 500 have gained since Trump’s election and are still slightly in the green since the start of 2025.

Yet the S&P 500 posted back-to-back gains of more than 20% in 2023 and 2024, raising questions about whether the bull rally can continue in 2025.

Tech stocks, which pushed US indexes higher in 2024, have wavered in recent days. Nvidia (NVDA), Palantir (PLTR) and Tesla (TSLA) were leading the selloff in stocks on Tuesday. Palantir, a star of 2024, has fallen about 30% in the past five days.

Tesla shares were down 8% by midday Tuesday, bringing the company’s market value below the $1 trillion mark.

Two out of three traders believe the market is overvalued, according to Charles Schwab’s quarterly trader client sentiment survey. Yet bullish traders still outnumber bearish traders 51% to 34%.

“It’s clear that the majority of traders believe there’s some froth in the market, but on balance they also feel like there’s still more room for the bulls to run,” said James Kostulias, head of trading services at Charles Schwab.

While there is looming uncertainty, some strategists think fundamentals like strong corporate earnings will drive stocks higher.

“While we continue to expect volatility ahead as investors grapple with the potential impact of Trump’s proposed policies, we believe markets are likely to refocus on fundamentals that should support the equity rally further,” said Solita Marcelli, chief investment officer for the Americas at UBS Global Wealth Management, in a note Tuesday.

CNN’s David Goldman and Matt Egan contributed reporting.