The U.S. financial markets have found themselves in turbulent waters as President Donald Trump trade war impacts send shockwaves through the global economy. Despite a slight market rebound on Tuesday, investors remain wary, and alarm bells continue to sound across asset classes. The Dow Jones Industrial Average, one of the most closely watched indices, has experienced its worst April performance since 1932, plummeting 9.1% in just the first three weeks. Comparisons to the Great Depression are no longer theoretical—they’re being made openly by analysts and investors.
Similarly, the broader S&P 500 index has fallen 14% during Trump’s new term, making it the worst start to a presidency since 1928, according to Bespoke Investments. Even with Tuesday’s modest gains, the U.S. market remains in a slump that rivals only the most volatile historical periods. Financial experts are now closely watching whether this trajectory will continue or whether the administration will alter its course.
Trump Trade War: Investors Flee U.S. Dollar and Bonds
As confidence in the U.S. economy weakens, so does faith in the nation’s currency. The U.S. dollar has dropped 5.5% since the start of Trump’s current term—its worst performance on record since the Ford administration. This downturn even surpasses the dollar’s 3% fall during the same time frame in Trump’s first term. The greenback hit a three-year low on Monday, underscoring concerns over economic direction and stability.
Typically, in times of economic anxiety, U.S. Treasury bonds act as a safe haven. However, even this refuge appears to be faltering. Rather than flocking to government debt, investors have sold off bonds, pushing yields upward. The 10-year U.S. Treasury yield recently jumped to 4.4%, just weeks after falling below 4%, signaling extreme volatility in a market usually known for its stability.
Meanwhile, international markets are reaping the benefits of investor hesitancy toward U.S. assets. The MSCI All World Index, excluding the United States, has gained 2.9% during Trump’s term—nearly matching the start of former President Joe Biden’s term and surpassing performance levels during some of Trump Trade War earlier market booms.
Oil, Gold, and Global Outlook Paint a Gloomy Picture
As investors adjust to the shifting landscape, commodities are also reacting sharply. Oil prices have plunged 19%, marking the worst start to a presidential term since Bill Clinton’s second administration in 1997. Fears of a global recession and reduced demand for travel and shipping have triggered a sharp sell-off in crude oil.
On the other hand, gold is surging, acting as a safe harbor amid widespread financial unease. Prices have climbed more than 25%—a historic rise that has shattered previous records, including those set during Jimmy Carter’s term in the 1970s.
According to the International Monetary Fund (IMF), the global economy is entering a period of significant disruption. In its latest report, the IMF described a “reset” of the 80-year-old global trade system, warning of slowed growth and resurgent inflation. Goldman Sachs CEO David Solomon echoed these concerns, highlighting how the unpredictability of Trump Trade War tariffs, especially the April 2 “Liberation Day” announcement, has left businesses unable to plan or adapt.
“The level of uncertainty is too high,” Solomon said. “It’s not productive… and we will see that effect on economic growth soon.”
As the market braces for what lies ahead, comparisons to historic downturns serve as a stark reminder: volatility driven by geopolitical decisions can quickly reshape the financial world.
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