Stocks That Surged and Plunged Due to Trump and Powell

Stocks That Surged and Plunged Due to Trump and Powell

※ The stock market is highly sensitive to political and economic events, and two figures who have significantly impacted market trends in recent years are former U.S. President Donald Trump and Federal Reserve Chairman Jerome Powell. While Trump's policies, such as tax cuts and trade wars, influenced investor sentiment, Powell's monetary policy decisions—including interest rate hikes and cuts—directly impacted market liquidity and risk appetite.
Certain stocks benefited from Trump's business-friendly policies, while others suffered due to trade disputes and regulatory changes. Similarly, Powell’s decisions on interest rates and inflation control played a key role in market movements, creating winners and losers across different sectors.
This article examines five stocks that surged and five that plunged due to the policies and leadership of Trump and Powell. 😅

 

Five Stocks That Surged Under Trump and Powell

1. Apple Inc. (AAPL)

• Why It Surged:
  Under Trump’s presidency, Apple benefited from corporate tax cuts, which allowed it to repatriate billions of dollars in cash held overseas. This led to massive share buybacks and dividend increases. Additionally, Powell’s lower interest rate policies during economic downturns helped fuel continued consumer demand for Apple’s products.
• Impact of Powell’s Monetary Policy:
  Lower interest rates helped Apple finance growth at a lower cost, boosting its stock price.

2. JPMorgan Chase & Co. (JPM)

• Why It Surged:
  Trump’s policies, including financial deregulation and tax cuts, benefited large banks like JPMorgan. Rising interest rates under Powell (before COVID-19) also helped banks improve their net interest margins.
• Impact of Powell’s Monetary Policy:
  Higher rates initially boosted JPMorgan's profitability, but later rate cuts to counteract economic slowdowns created challenges.

3. Lockheed Martin (LMT)

• Why It Surged:
  Trump significantly increased defense spending, which directly benefited companies like Lockheed Martin. The increased demand for fighter jets, missiles, and other military equipment led to record-high revenues for the defense sector.
• Impact of Powell’s Monetary Policy:
  Powell’s interest rate cuts helped Lockheed Martin by keeping borrowing costs low for government contracts and expansion.

4. Home Depot (HD)

• Why It Surged:
  Trump’s tax cuts increased disposable income for many Americans, fueling a housing boom and home improvement spending. Powell’s rate cuts during economic slowdowns also helped drive demand in the real estate sector, benefiting Home Depot.
• Impact of Powell’s Monetary Policy:
  Lower mortgage rates due to Powell’s policies led to increased home sales, boosting Home Depot’s revenues.

5. Tesla Inc. (TSLA)

• Why It Surged:
  Despite Trump’s rollback of environmental regulations, Tesla thrived due to strong consumer demand for electric vehicles (EVs) and global expansion. Powell’s monetary policies kept borrowing costs low, allowing Tesla to raise capital easily and scale production.
• Impact of Powell’s Monetary Policy:
  Low interest rates made it cheaper for Tesla to borrow funds for expansion, and increased investor speculation led to Tesla’s stock soaring.

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Five Stocks That Plunged Due to Trump and Powell

1. Boeing (BA)

• Why It Plunged:
  Trump’s trade war with China led to retaliatory tariffs on U.S. goods, including aircraft. Boeing, which relies heavily on international sales, faced major setbacks as orders from China declined.
• Impact of Powell’s Monetary Policy:
  Higher interest rates early in Powell’s tenure increased borrowing costs for airlines, reducing demand for new planes.

2. General Motors (GM)

• Why It Plunged:
  Trump’s tariffs on steel and aluminum increased manufacturing costs for automakers like GM, reducing profit margins. The uncertainty around trade policies also hurt investor confidence.
• Impact of Powell’s Monetary Policy:
  Interest rate hikes made auto loans more expensive, slowing car sales. Powell’s later rate cuts helped stabilize the industry, but the damage had already been done.

3. Macy’s (M)

• Why It Plunged:
  Brick-and-mortar retailers like Macy’s suffered from Trump’s trade war, as tariffs on Chinese goods increased costs for consumer products. Additionally, the shift to e-commerce, accelerated by changing consumer habits, hurt traditional department stores.
• Impact of Powell’s Monetary Policy:
  Higher interest rates reduced consumer spending on discretionary goods, further weakening Macy’s financial performance.

4. Caterpillar Inc. (CAT)

• Why It Plunged:
  As a global manufacturer of heavy machinery, Caterpillar was hit hard by Trump’s trade war with China. Tariffs and supply chain disruptions made it difficult for the company to maintain stable revenues.
• Impact of Powell’s Monetary Policy:
  Rising interest rates increased borrowing costs for construction firms, reducing demand for Caterpillar’s equipment.

5. AT&T (T)

• Why It Plunged:
  The Trump administration opposed AT&T’s acquisition of Time Warner, leading to regulatory hurdles. Additionally, competition in the telecom sector intensified, and rising debt levels worried investors.
• Impact of Powell’s Monetary Policy:
  Higher interest rates made it more expensive for AT&T to manage its debt, leading to financial strain and stock price declines.

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Key Takeaways for Investors

1. Government Policies Can Create Market Winners and Losers
   Trump’s tax cuts and deregulation helped banks and defense contractors, while his trade wars hurt manufacturing and retail.
2. Monetary Policy Affects Every Sector Differently
   Powell’s interest rate hikes initially boosted banks but hurt companies with high debt. Later, his rate cuts helped growth stocks like Tesla.
3. Diversification is Essential in a Volatile Market
   Investors who balanced their portfolios across different sectors were better positioned to navigate these market fluctuations.
4. Market Sentiment Reacts to Leadership Uncertainty
   Stocks reacted strongly to Trump’s unpredictable trade policies and Powell’s shifting stance on interest rates. Investors must monitor political and economic changes closely.

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Conclusion

Trump’s economic policies and Powell’s monetary decisions had profound impacts on the stock market, creating both winners and losers. While stocks in the defense, banking, and tech sectors flourished under their leadership, manufacturing, retail, and telecom faced challenges.

Understanding how political and economic forces interact is crucial for making informed investment decisions. As new leadership and policies emerge, investors must stay vigilant and adjust their strategies accordingly.