The stock market has had a terrible start to March.
After the S&P 500 delivered an impressive 24% return last year, it hit all-time highs in mid-February. Since then the benchmark has tumbled about 6%, including a 3% drop in March. The retreat has raised eyebrows among investors, who have grown accustomed to gains.
In the past two years the stock market’s ability to rally off similar selloffs has encouraged many to “buy the dip.” Whether that’s a smart move this time is anyone’s guess, but those in the bullish camp have been saying that if the slide continues, they expect market-friendly moves out Washington.
That optimism is fueled by the fact that Donald Trump was an avid stock-market watcher during his first presidency.
The potential for stocks to benefit from moves by the administration has become a major focus, leading Treasury Secretary Scott Bessent to weigh in on the matter this week.
Bessent is a stock market veteran who trained under the legendary hedge-fund manager Stanley Druckenmiller, including during a stint at Soros Fund Management. Bessent went on to run his own hedge fund, Key Square Group, before Trump appointed him to run the Treasury in 2025.
Given Bessent’s key role in Donald Trump’s inner circle and his long experience navigating the stock market, it may be wise to pay attention to what he’s saying now.
U.S. Treasury Secretary Scott Bessent offered bold words on stocks after the S&P 500’s recent drop.Bloomberg/Getty Images
The stock market’s decline might seem to have come out of the blue, but it did not. Plenty of factors explain the S&P 500’s struggles in 2025, including
The Federal Reserve’s hawkish monetary policy in 2022 and 2023 made substantial headway in crimping inflation, causing it to fall from above 8% to below 2.5% in 2024.
Progress stalled, however, since the Fed started cutting interest rates in September. In January, the Consumer Price Index showed prices grew 3% from the year-earlier period, faster than the 2.4% recorded at September’s low.
Increasing inflation is taxing consumer budgets, causing them to rethink purchases and retrench. As a result, recent economic data are raising red flags that a recession might be in the offing.
The steady wave of job cuts doesn’t help consumer confidence, either.
Since 2022 roughly 407,000 technology workers have lost their jobs, according to Challenger, Gray, & Christmas. In total, 172,000 Americans were laid off in February, the most in the month since 2009.
On March 7 the Bureau of Labor Statistics added more bad news, reporting that 151,000 new jobs were created in February, below Wall Street’s 163,000 forecast.
The impact of shifting spending on the economy is already flowing through into data important to gross domestic product, or GDP. The Atlanta Fed keeps a running forecast of GDP, and after the latest updates its GDPNow forecast is negative 2.8% for the first quarter.
Of course, more data will likely improve that reading over the coming weeks. Nevertheless, first-quarter activity will likely fall shy of the 3% readings last summer and fall.
The potential for the stock market to rally rises as stocks become oversold. There’s evidence of that happening. For example, CNN’s Fear/Greed Index, which measures a slate of factors to determine investors’ optimism and pessimism, is registering “extreme fear.”
Longtime veteran technical analyst Helene Meisler points out in a post on TheStreet Pro that the Investors Intelligence survey showed the number of bulls dropped to 36%, the lowest since October 2022.
Meisler also notes that a measure of stocks making new highs versus new lows shows the Nasdaq, home to technology stocks that have been hit particularly hard lately, as oversold.
If the market does rally from here, it’s likely because stocks are due for some relief rather than due to help from the Trump administration. Those hoping the White House would prop up stocks, something commonly referred to as a “Trump put,” got discouraging news from Secretary Bessent.
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Puts, bets that securities prices will decline, are used by options traders for downside protection.
“There’s no put,” he said in a CNBC interview.
Bessent said the administration isn’t targeting stocks. Instead, it’s targeting policies.
“The Trump call on the upside is if we have good policies, then the markets will go up,” said Bessent.
