Following Donald Trump’s return to the White House, Wall Street celebrated with the S&P 500 Index surging over 5% in the month after Election Day, adding approximately $2.8 trillion in value. This rally was driven by expectations of economic stimulation under the new administration. Despite concerns over tariffs and deportations potentially fueling inflation as 2025 approached, stocks remained near all-time highs. The S&P 500 reached a record on February 19, marking a 6.3% increase since Election Day, equivalent to about $3.4 trillion in added market value.
However, the imposition of tariffs has begun to weigh on the market, erasing the $3.4 trillion rally. Treasury Secretary Scott Bessent highlighted the decline in mortgage rates since Election Day and Inauguration as a significant win for Americans. Despite this, the spread between the 10-year Treasury and mortgage rates has widened notably since Trump took office.
The tariffs come amid existing pressures on the U.S. housing market. Signed contracts on existing homes dropped to record lows in January, according to the National Association of Realtors, while new home sales fell by 10% in January compared to December, as reported by the U.S. Census. Housing prices remain high, with inventory levels historically low.
— news from Bloomberg