policyIs President Donald Trump's Tariff and Trade Policy Setting Wall Street Up for a Stock Market Crash in 2026? A Comprehensive Analysis Weighs In.
When the stock market crosses the finish line for 2025 in a little over two weeks, investors are likely to be smiling. Through the closing bell on Dec. 11, the iconic Dow Jones Industrial Average (^DJI 0.51%), benchmark S&P 500 (^GSPC 1.07%), and growth-propelled Nasdaq Composite (^IXIC 1.69%) have rallied 14%, 17%, and 22% year-to-date, with all three indexes logging several record-closing highs. It would appear that Wall Street has picked up right where President Donald Trump's first term left off. Although the stock market's major indexes have advanced under the tenure of most presidents over the last century, they outperformed in a big way during Trump's first term (January 2017 – January 2021). The Dow and S&P 500 climbed 57% and 70%, respectively, while the Nasdaq surged 142%. However, this investment gravy train has the potential to come to an abrupt halt in 2026. Though the stock market regularly contends with headwinds, President Trump's tariff and trade policy presents a unique challenge that a comprehensive analysis suggests will be difficult for Wall Street to overcome. President Trump speaking with reporters. Image source: Official White House Photo by Andrea Hanks, courtesy of the National Archives. Will Donald Trump's tariff and trade policy lead to a stock market crash in the new year? On April 2, the president unveiled his touted tariff and trade policy. It featured a sweeping 10% global tariff, along with higher "reciprocal tariffs" on dozens of countries that were deemed to have adverse trade imbalances with America. Tariffs have been a topic Trump has discussed since he was on the campaign trail. The purpose of implementing tariffs is to make American-made products more price-competitive with those being imported into the country. Further, it has the potential to protect U.S. jobs by encouraging multinational businesses to manufacture their products domestically.Advertisement On paper, Trump's tariff and trade policy has its positives. Bu
