Breitbart Business Digest: The Market Finally Realized Trump Meant It

Wall Street Capitulates to Trump’s Tariffs

It’s hard to say what finally broke Wall Street’s will. Maybe it was the retaliatory 34 percent tariff from Beijing, or the sight of Jerome Powell brushing off the carnage like a man who’d just changed a flat tire. Maybe it was the unmistakable conviction in Donald Trump’s voice when he said, “China played it wrong. They panicked.”

Or maybe it was the simple realization—years in the making, but somehow still a surprise—that this president is not going to hand back the steering wheel to the Chamber of Commerce.

Whatever the trigger, Friday felt like capitulation. Not just a selloff or a rout—though it was certainly that, with the Nasdaq down nearly six percent, the Dow off more than 2,200 points, and the S&P 500 hemorrhaging value like a biotech firm with a bad FDA call. No, this was something more specific: a psychological surrender to the idea that tariffs are not merely a negotiating tactic or a transitory flourish. They are, for better or worse, policy. And not just policy, but a pillar of a new economic order in which global capital doesn’t get to write the rules.

The market, like a poker player who stayed in the hand far too long, seemed to be operating under the assumption that Trump would eventually fold. Surely he would blink. Surely Powell would cut. Surely this was all theater. The curtain will come down, everyone will take their bows, and we can return to life as we knew it.

You can see this in a recent column by the Wall Street Journal‘s investing sage Jason Zweig:

While nothing is certain in the short term, a few things are highly likely in the longer term.

“Ultimately the costs of the tariffs will be recognized and they will be rescinded,” says Bryan Taylor, chief economist at Finaeon, a research firm in Irvine, Calif., that compiles and analyzes centuries of financial data.

“When you look at the past,” he adds, “you see that eventually markets do recover, because over time logic prevails.”

But it’s now clear the tariffs will not be rescinded.

Powell Refused to Panic, So Markets Panicked Instead

Just hours after China fired back, Powell took the stage and announced calmly and firmly that the Federal Reserve would not be providing any immediate monetary relief. Inflation, he noted, remains above target. Rate cuts, he hinted, are off the table for now. The economy, he added, is not yet showing signs of weakness that would justify intervention. And the kicker: “We don’t need to be in a hurry.”

This came as news to the traders who were, at that very moment, sprinting for the exits.

Like President Trump, Chairman Powell is a man who knows he is in his last act in public life. There’s no third term for him at the helm of the central bank. He’s thinking about his legacy. And he posed on Friday as a man unmoved by the howling of bond traders, impervious to the usual warnings from economists about business confidence and financial conditions. He looked out at the wreckage of the stock market and, to the market’s horror, gave it a shrug.

And then, right on cue, came Larry Summers—horrified that the White House might pursue a policy the stock market doesn’t like. “We don’t have these kinds of stock market responses in response to policies that the President of the United States is proud of,” he said in an interview with CNN’s Kasie Hunt. “That is something entirely without precedent.”

Well, not quite. Presidents have defied markets before, though not often. What was truly remarkable about Summers’ comment was what it implied: that stocks ought to have veto power over policy. That a few red ticks on a Bloomberg terminal constitute a rebuke from history itself. That the Dow is not just a barometer of sentiment, but a tribunal of legitimacy. One might have expected this kind of theology from a hedge fund newsletter, not from a Democratic elder statesman who once championed industrial policy and warned about financialization. But here we are.

Summers wasn’t alone. Around the globe, officials lined up like mourners at a wake, lamenting the death of what they like to call the “rules-based” global order—by which they meant one that allows every other country in the world to look out for itself first, building enormous trade surpluses that fund their generous social welfare states while here in the U.S. corporations offshore American jobs to maximize shareholder value. The press and Wall Street dutifully repeated their liturgy. CNN warned of a $3 trillion loss in stock market value. JPMorgan raised its odds of a global recession to 60 percent. The talking heads on cable shook their heads and called the whole thing madness.

And yet, out in the real economy, something strange happened: the data didn’t cooperate.

The Economy Also Refuses to Panic

The March jobs report came in hot—228,000 new jobs, a clean beat over the 140,000 expected. Wage growth held steady. Labor force participation ticked up. Not even a tremor of panic in the labor market. Wall Street had been bracing for weakness. What it got was strength.

Zweig, in his characteristically thoughtful column, noted that over the long arc of history, markets recover. They always do. Which may be true. But the more immediate truth is that markets had been counting on something quite specific: that Trump’s tariffs were temporary, tactical, and reversible.

That assumption may have died on Friday. What the market saw wasn’t just retaliation or volatility. It saw Trump holding his ground, and Powell refusing to cushion the blow.

For investors raised on QE, rate cuts, TARP, and central bank forward guidance, this was uncharted territory. They were, for the first time in years, being told: no. No bailouts, no stimulus, no reversal. The old contract—the one that said markets always get what they want—had been voided.

For many of them, it felt like a betrayal. A violation of the social contract they believed bound elected officials to the will of capital. Losses were supposed to be for other people—for steelworkers in West Virginia, shoemakers in New Hampshire, furniture men in Ohio, the folks making auto parts in Indiana and Michigan, or weaving textiles in South Carolina. The kind of people who, when globalization hollowed out their industries, were told to learn to code. Not the investor class. Not the people who were promised that markets would never be asked to bear the burden of policy.

Trump, for his part, seemed unfazed. “Now is a great time to get rich,” he said.

And if you squint past the panic, he may have a point. Tariffs are not designed to protect asset prices. They’re designed to rebuild industry, reassert sovereignty, and tilt the playing field back toward production and labor. And, if other countries are willing to give up their mercantilist practices, tariffs could even bring us to something closer to genuinely free trade.

While the pain for investors may not be intentional, it probably could not be avoided. The shares of the corporate incumbents, the winners under the rules of the global economy that prevailed for decades, likely had to decline as their crowns are removed and the principalities are overthrown.

This isn’t about smoothing the path for investors. It’s about building a road to share prosperity that doesn’t lead through Shanghai.

Breitbart