The US stock market is in the midst of its longest losing streak of Donald Trump’s presidency. Although things are looking up ahead of the open today (Oct. 12), the six-day slide has erased nearly 7% from the stocks in the benchmark S&P 500 index.
Losing streaks under Trump
Still, the S&P 500 is up 20% since Trump’s inauguration, and even more if you count his election a few months earlier as the start of his influence on markets. At this stage in his presidency, the market under Trump has performed more strongly than just about every other modern president over the same period. Every president, that is, except Barack Obama:
Obama took over at the tail end of the brutal crash in stocks that accompanied the subprime-driven global financial crisis in the final year of George W. Bush’s second term. Although the market recovered smartly in Obama’s first two years in office—aided by unprecedented emergency stimulus by the Federal Reserve—it would take most of his first four-year term for stocks to surpass their pre-crisis highs.
Still, for Trump—who is never shy to criticize his predecessor—any measure by which he falls short of Obama is unwelcome. Trump is also quick to boast about market confidence in his policies, and has taken to blaming the Fed’s rate hikes for the recent market meltdown. For their part, investors say that the burgeoning trade war between the US and China, stoked by Trump, is also a factor.
“While we are mindful of the potential momentum that may gather around this sell-off, the fundamentals are not flashing red yet,” said Antoine Lesné, a strategist at State Street Global Advisors, in a note to investors Indeed, several indicators suggest that concerns over the decline’s significance might be overdone.
Whatever the case, a severe wobble so close to midterm elections is reason for Trump, and Republicans, to worry. Here, there is another unfavorable comparison with Obama: Despite rising markets at the start of his tenure, the Democrats were trounced in the midterms.