Trump Mirrors Nixon: A 100-Day Déjà Vu

By Nikitha Thota

America faces its worst 100-day market performance since the Nixon era. The first 100 days of President Donald Trump’s second term have been nothing short of chaotic, especially for investors. The U.S. stock market has posted its worst performance since President Richard Nixon’s second term in 1973.

S&P 500 Tumbles: Worst 100-Day Start in Over 50 Years

The S&P 500 Index is one of the best methods of objectively measuring the health of the stock market. The Index measures the performance of 500 of the largest and most influential companies in America.

During Trump’s first 100-days of this term, the S&P 500 decreased by 7.3%, which is the worst 100 day start for any U.S. president over the last fifty years. More simply, this means that investors in the S&P 500 (over 75% of Americans have investments in this index) lost a significant amount of money in their portfolios since taking office.

Such a poor performance in such a short period shows the level of concern across Wall Street; in relation to this performance, the concerns are primarily creeping into the depths of Trump’s policy change and the previous and current trade tensions.

Trade Wars Renewed: Liberalization Day’ Tariffs Shake Global Trade

At the heart of the current situation, is President Trump’s trade initiatives. He applied broad tariffs in a “Liberalization Day” moment. By increasing tariffs in the U.S., tariffs make it more costly to purchase foreign goods. Tariffs can assist domestic firms based on competition, but they also can create other unintended implications for the economy- i.e. higher costs for consumers, and retaliation from trading partners. In this case, the “Liberalization Day” tariffs meant; These sweeping tariffs, though aimed at protecting domestic industries, triggered a cascade of unintended consequences. They caused significant disruption to global supply chains, leading to delays and shortages. Imports from China plunged sharply, as businesses scrambled to adjust to the sudden rise in costs. The impact was not just felt in the U.S. manufacturing centers around the world panicked, with companies struggling to adapt to the changing trade dynamics. As uncertainty loomed large, multinational corporations found themselves navigating unpredictable markets, unsure of how long the turbulence would last. Market professionals agree that these initiatives have created real and present “semi-permanent uncertainty” throughout the global financial system.

Companies Acting: Layoffs and Cost Saving Actions

U.S. companies did not take long to react. One of the best examples was UPS, the world's largest courier and package delivery service. UPS announced the elimination of 20,000 jobs while also announcing location closures across the country. All this was due to a significant drop in delivery volumes resulting from stagnant trade activity. The layoffs are more than just numbers; they are the result of the policy shocks that have hit logistics, retail, and manufacturing hard. Other companies are reviewing their international approaches, slowing expansion, and cutting back on investments.

Dollar Slides: Worst 100-Day Currency Drop for Any President The problems were not just with the stocks.

The U.S. dollar, a beacon of economic strength, suffered too. During Trump's 100 days in office, the dollar fell 10%; the worst of any president's first 100 days. When the dollar falls, it impacts everything from making imported goods more expensive to expensive borrowing for America. When the dollar falls, it indicates global investors are losing confidence in U.S. Economic Policy.

Investor Fear: Volatility at a 5-Year High

Each time the market gets a little jittery the Cboe Volatility Index (VIX), or "the fear gauge" is a leading indicator to monitor, as in April it catapulted to a five-year high, signaling fear and nervousness amongst investors. The spike in fear was occurring while new tariffs were being announced, and military tensions were steadily escalating. Although the VIX calmed considerably after its initial spike, it was still much higher than the level before Trump’s 2016 inauguration signaling that uncertainty is here to stay.

Why are Investors Fearful?

Aggressive Trade Policies: Companies always do not know what or when tariffs will be announced, and the suddenness is challenging for firms doing business globally. Geopolitical Tensions; Military tensions are rising between China and are causing instability with other relationships. Investors are finding it hard to understand where Trump’s second-term direction is heading. Corporate Blueprints; announcing job cuts, scrapping facilities, halting investments, and announcing loss of profits are signs that firms have troubled times ahead.

Historical Perspective: Decline and Fall: Just How Bad Is It?

To put the current circumstances in context, let us look at Nixon's second term vs. Trump's second term:

• Nixon's second term (1973): The markets crashed hard on inflation and the oil crisis.

• Trump's second term (2025): The markets rattled with tariffs, trade disruption, and other unpredictable economic events.

Both episodes saw rapid erosion in investor confidence and an accompanying sharp decline in market valuations.

What Can Investors Do Right Now?

Market corrections like this are difficult, but not uncommon. Here are a few simple strategies to help you weather the storm:

• Stay informed: Keep track of economic policies and follow global trade developments.

• Diversify: Make sure your investments are spread across sectors and regions, to mitigate risk.

• Think long-term: Avoid emotional decisions based on short-term volatility.

• Get professional advice: Sit down with your financial advisor to reconsider where you are in your portfolio.

What is Next for the Market?

The next steps in the market are not clear. Much will depend on whether Trump's administration aims to smooth over trade relationships or make economic reforms that will create hope. If they choose not to smooth over trade relationships, we could be heading for an extended time frame of market volatility. Now, everyone; investors, businesses, and everyday citizens are closely watching everything that comes out of Washington.

Conclusion: An Unsettling Recurrent Theme

We cannot draw more than somewhat tentative conclusions about the future of the markets and the economy. President Trump has officially begun his second term with a significant jolt to the global economy that circles back to some of the darkest market moments of the Nixonian era. The first 100 days of U.S. stocks, the worst start in 50 years shows that this situation is more than a bump in the road, it shows that there is deep-seated concern about trade wars, geopolitical instability, and erratic policy choices. We have a perfect storm of collapsing imports, layoffs, weakening dollar and frayed investor nerves all feeding from an environment of "semi- permanent uncertainty." Unless we see a course correction soon, both Wall Street and main street may be stuck with a pattern of policies that put disruption ahead of stability. In the end, it is a clear message from the markets that confidence is fragile, and even though markets might wrestle with the importance of leadership choices more than ever before.