U.S. President Donald Trump listens while Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, not pictured, speaks to members of the media on the South Lawn of the White House in Washington, D.C., U.S., on Tuesday, March 3, 2020.
Stefani Reynolds | Bloomberg | Getty Images
President Donald Trump has long touted market gains under his administration as an endorsement of his economic policies and, on multiple occasions, boasted about the Dow Jones Industrial Average’s gains under his tenure. That was before he was blindsided by an invisible microbe.
With the coronavirus spreading economic mayhem across the globe, the Dow’s 1,500-point 7% drop on Wednesday pushed the 30-stock index below the level where it closed on Jan. 19, 2017, the day before Trump took office. The sell-off is part of a historic market meltdown that has wiped out years of gains in a matter of weeks.
The blue-chip index is still more than 800 points, or 4.4%, above where it closed on Nov. 8, 2016, when Trump won his improbable election. His victory fanned a surge of investor optimism in anticipation of his business-friendly policies.
The Dow was last at 19,084, more than 600 points below its close of 19,732.40 a day before Trump’s inauguration.
Stocks have plunged since mid-February as efforts to contain the coronavirus fanned fears of a global recession. The S&P 500 was more than 25% below its February high by Tuesday’s close while the Dow was off its own record by more than 28%.
The White House did not immediately respond to CNBC’s request for comment. A price war between OPEC and its oil-producing allies has also whacked energy equities and crude.
The recent stock market decline may prove a tough blow to Trump, who has throughout his time in office used the Dow as a proxy for the success of his economic agenda.
Trump tweeted on Dec. 23, for example, that the Dow was up 55% since his election and promised — less than three months before stocks entered a bear market — that “the best is yet to come.”
But Trump’s fixation on day-by-day stock market is hardly new: Less than one month into his presidency he boasted on Twitter that equities had hit a new record.
“Stock market hits new high with longest winning streak in decades,” he wrote on Feb. 16, 2017. “Great level of confidence and optimism – even before tax plan rollout!”
To be sure, the Dow is still about 1,400 points above where it traded the night before Trump beat Democrat Hillary Clinton. The Dow would need to fall nearly 1,400 points, another 7%, to erase all of its gains since his election. The Dow is up 7.6% since his election.
Even though Trump wasn’t in charge yet, investors snapped up stocks between Election Day 2016 and his inauguration as the promise of corporate tax cuts and regulation rollback was enough for Wall Street to bet on U.S. profit growth.
The president has largely come through on his promises to lower the corporate tax rate and ease regulations on many of the nation’s largest companies. Trump and Republican lawmakers passed the landmark Tax Cuts and Jobs Act in late 2017 that cut the rate U.S. corporations pay to 21% from 35%.
Numerous American companies have cited the tax legislation for repatriating overseas cash, returning employment and factories to the U.S. and better-than-expected earnings throughout 2018. It also stoked a historic surge in stock buybacks for much of the president’s term as the largest companies in the U.S. return cash to stakeholders.
The Trump administration has also rolled back key Obama-era environmental regulations, including the Water of the United States rule and renouncing the Paris climate agreement.
In a move representative of regulatory easing throughout his time in office, the president issued an executive order in the second month of his term directing federal agencies to reconsider the Clean Water Rule at the urging of some of the nation’s largest farmers.
The Trump administration in September announced it had successfully repealed the rule, which had placed limits on chemical use near streams and wetlands.
— CNBC’s Marty Steinberg contributed to this report.
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