Wall Street enjoys a Trump sugar rush – will it crash?

Wall Street investors could be repeating the mistakes they made in Donald Trump's first term, when many “Trump trades” enjoyed a short pop and then underperformed. Will history repeat itself?

New York Stock Exchange, Wall street, New York, USA
(Image credit: Matteo Colombo)

Investors are feeling as “pro-US as a bald eagle eating apple pie”, says Luke Kawa for Sherwood News. Bank of America’s latest global fund manager survey shows marked bullishness on US assets and a dismissive attitude to the rest of the world. Yet investors could be repeating the mistakes they made in the president-elect’s first term when many “Trump trades” – from US small caps to a stronger dollar – enjoyed a short pop only to underperform over the full four-year term.

We are sometimes advised to take Trump “seriously, but not literally”, says James Mackintosh in The Wall Street Journal. On Wall Street that has resulted in a pick ’n’ mix: investors are taking the Trump policies they like (tax cuts and deregulation) seriously, while dismissing those they dislike (immigration clampdowns and high tariffs) as just “campaign rhetoric”.

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Markets editor

Alex is an investment writer who has been contributing to MoneyWeek since 2015. He has been the magazine’s markets editor since 2019. 

Alex has a passion for demystifying the often arcane world of finance for a general readership. While financial media tends to focus compulsively on the latest trend, the best opportunities can lie forgotten elsewhere. 

He is especially interested in European equities – where his fluent French helps him to cover the continent’s largest bourse – and emerging markets, where his experience living in Beijing, and conversational Chinese, prove useful. 

Hailing from Leeds, he studied Philosophy, Politics and Economics at the University of Oxford. He also holds a Master of Public Health from the University of Manchester.