Why Trump is

Crashing the Stock Market

Author

The Safe Investor
March 09, 2025

The Market's Nosedive: What's Happening?

The stock market has taken a serious hit. In the last 10 days, the S&P 500 has fallen over 5%, the NASDAQ is down more than 8%, and big names like Nvidia (-26%) and Amazon (-16%) are getting crushed. What’s causing this market meltdown? The answer points directly to three key factors: Trump’s aggressive tariff policies, economic uncertainty fueled by Doge, and seasonal market trends.

Tariffs and Trade Wars Are Back

Trump has slapped a 25% tariff on Canada and Mexico while doubling down on China. This has sparked fears of another trade war, similar to 2018 when the S&P 500 fell 20%. Investors are worried that history is about to repeat itself. The market thrives on stability, and when the White House throws economic bombs like these, panic sets in.

The Economy Is Slowing – Fast

Doge’s push to cut government waste and reduce national debt is causing short-term economic pain. Unemployment claims in Washington, D.C., have quadrupled in the last month, and GDP projections are flipping negative. The Atlanta Fed now expects Q1 2025 GDP to shrink by 2.8%—a stark reversal from the previous 2.3% growth projection. Two consecutive negative quarters mean one thing: Recession.

Import Surge Before Tariffs Hit

A surge in U.S. imports is another warning sign. Importers are rushing to bring in goods before Trump’s tariffs take effect. This distorts GDP calculations, making the economic slowdown look even worse.

Is Trump Intentionally Crashing the Market?

There are three theories about why Trump is playing with economic fire:

  1. He doesn’t understand the full impact of tariffs. His policies may be unintentionally triggering a recession.

  2. He’s a strategic genius. Some believe he’s driving down interest rates on purpose, which could lower the national debt and boost the economy in the long run.

  3. He’s playing a different game. Could Trump be engineering a market crash to allow certain investors to buy in at rock-bottom prices?

Value Investing Opportunities Amid the Chaos

Savvy investors know that market crashes create opportunities. Stocks drop for two reasons: company-specific problems or external economic factors. If a great company’s stock drops due to tariffs or recession fears rather than internal issues, it could be a golden buying opportunity.

What to Look for:

  • Strong revenue, net income, and cash flow growth

  • A durable competitive advantage

  • Low debt levels

What to Avoid:

  • Inconsistent profits

  • Weak business models

  • High debt burdens

Market Drops Are Normal—Here’s How to Prepare

History tells us that market downturns don’t last forever:

  • The S&P 500 drops 5% or more at least three times a year.

  • A 10% decline happens once a year on average.

  • A 20%+ drop (bear market) occurs roughly every six years.

Instead of panicking, investors can take advantage of dollar-cost averaging—buying in smaller increments as the market declines to get better overall prices.

Which Stocks Are the Best Bargains Right Now?

Nvidia (NVDA) -26%

Despite solid earnings and high demand, Nvidia’s stock is tumbling. Key support levels: $121, $101, $90, and $75. Long-term investors might see this as an opportunity.

Amazon (AMZN) -16%

Amazon is one of the strongest companies out there. Its intrinsic value is estimated at $221, with key support levels at $195, $166, and $151 if a deep recession hits.

Microsoft (MSFT) -12%

Currently down from its highs, Microsoft’s estimated value is $415 with key support levels at $364 and $324.

Alphabet (GOOGL) -14%

Google’s parent company is now undervalued, with a calculated intrinsic value of $223. Smart investors might use this dip as a buying opportunity.

Final Thoughts: Play the Long Game

Market corrections and even bear markets are inevitable. Whether Trump’s policies push us into a recession or not, smart investors will use this opportunity to scoop up quality stocks at a discount. Stay calm, stay diversified, and look for bargains—because history shows that those who invest wisely during downturns are the ones who come out on top when the market rebounds.

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