Bessent Blames 'Mag 7' for Market Drop, Not Trump's Policies

Ladies and gentlemen, buckle up! We've got a market rollercoaster on our hands, and U.S. Treasury Secretary Scott Bessent is pointing fingers at the Magnificent 7, not Trump's policies, for the recent selloff. Let's dive into the chaos and see what's really going on!

First things first, the market has taken a nosedive, losing 10% in just two days. Bessent, in an interview with Tucker Carlson, blamed the emergence of China's DeepSeek AI tool for the market decline, not Trump's economic policies. He even went so far as to say, "This market decline started with the Chinese AI announcement of DeepSeek." BOOM! That's a bold statement, folks!

Now, let's break down the Magnificent 7, the group of high-performing tech stocks that had been driving the market higher before the recent selloff. These stocks include Apple, Microsoft, Nvidia, Alphabet, Amazon, Meta, and Tesla. Bessent's comments suggest that the market's recent troubles are more about the "Mag 7" problem than a "MAGA" one. In other words, the market's woes are more about the tech sector's struggles than Trump's policies.

But wait, there's more! Bessent also reiterated the Trump administration's strong-dollar policy, dismissing assertions that the tariff drive was a deliberate effort to weaken the dollar. He said, "We have a strong-dollar policy and we are putting in all of the necessary ingredients to make sure the dollar is strong over the long run." This is a big deal, folks, because a strong dollar can make U.S. goods more expensive for foreign buyers, potentially reducing demand for U.S. exports.

Now, let's talk about the Magnificent 7's performance. These stocks have been under pressure from Trump's tariff threats, which have spooked investors and driven some to flee stocks for safe havens like gold and Treasurys. For example, Apple led the megacap cohort's charge downward, sliding more than 9% amid concerns that Trump's broad plan for levies would hurt the personal technology giant given its production abroad. Amazon dropped around 9%, marking its biggest one-day decline since 2022, after Trump also signed an executive order ending the de minimis trade loophole, which has allowed shipments worth less than $800 into the U.S. duty-free. The change is effective May 2.

But it's not all doom and gloom, folks! There are opportunities out there for investors who are willing to take a long-term perspective. For example, the S&P 500 has come back from every one of its downturns to eventually make investors whole again. That includes after significant events like the Great Depression, the dot-com bust, and the 2020 COVID crash. So, don't panic, and don't sell during market downturns. Instead, focus on a long-term investment horizon and look for opportunities to buy quality names at cheaper price points during market volatility.



In conclusion, the market's recent troubles are more about the Magnificent 7's struggles than Trump's policies, according to U.S. Treasury Secretary Scott Bessent. The Trump administration's strong-dollar policy could also affect the performance of U.S. stocks, particularly those in the Magnificent 7. But don't panic, folks! There are opportunities out there for investors who are willing to take a long-term perspective. So, stay calm, stay focused, and keep your eyes on the prize!