Trump’s Approval Plunge: A Market Storm on the Horizon?

The first 100 days of a presidency are typically a honeymoon period, but Donald Trump’s second term is shaping up to be anything but. Polls in April 2025 reveal his approval rating has cratered to a historic low of 39%, the worst for any president since data tracking began in the 1940s. This isn’t just a political blow—it’s a red flag for investors. With economic dissatisfaction, governance disputes, and partisan fractures at the core of the decline, the implications for markets are profound.

The Economic Elephant in the Room

The primary driver of Trump’s disapproval? Economic policies. Over 60% of Americans now disapprove of his handling of tariffs, inflation, and trade, with 71% fearing a recession. The Washington Post-ABC News-Ipsos poll found that 53% believe the economy has worsened since his inauguration—a stark contrast to his 2024 campaign promises of “prosperity.”

This pessimism isn’t theoretical. The S&P 500 has dropped 8% since January 2025, with sectors tied to trade and manufacturing bearing the brunt.

Automakers like Ford and GM, which rely on global supply chains, have seen stock declines of 10–15% as tariffs disrupt production. Meanwhile, the VIX Volatility Index has spiked to 25, signaling investor anxiety—a stark departure from the 16–18 range seen during Biden’s final months.

Partisan Gridlock, Market Uncertainty

Trump’s approval among Republicans remains high at 88%, but cracks are emerging. Even within his base, 15% disapprove, and independents—a critical voting bloc—are fleeing: his approval there has collapsed to 33%. This polarization isn’t just political; it’s a recipe for legislative gridlock.

Gridlock means stalled policies, regulatory uncertainty, and delayed infrastructure spending—all of which hurt long-term growth. Investors in sectors like energy or tech, which rely on steady regulatory environments, are likely to tread carefully.

Legal Overreach and the Governance Wildcard

Trump’s push to expand presidential power—such as withholding federal funding from universities opposing his policies—has sparked legal battles. Two-thirds of Americans now side with institutions like Harvard in their court challenge, and 56% believe his actions exceed legal limits.

This isn’t just a PR problem; it’s a risk for industries dependent on government contracts. Defense contractors or healthcare firms tied to federal programs may face delays or reduced funding if lawsuits disrupt White House priorities.

Demographic Divides: A Warning for Consumer Firms

Asian Americans—a key swing demographic—have seen their approval of Trump plunge from 47% to 29%, and young voters (18–29) now give him a 31% approval rating. These groups are central to consumer-driven sectors like tech, retail, and entertainment.

As trust erodes, younger and diverse populations may shift spending to brands seen as socially responsible, while older, Republican-leaning demographics dominate niche markets. This fragmentation could force companies to double down on targeted marketing—a costly move in a slowing economy.

The Bottom Line: Brace for Volatility, Bet on Resilience

Trump’s historic low approval ratings aren’t just a political crisis—they’re a market stress test. The data paints a clear picture:

• 60% disapprove of economic policies, with 71% predicting a recession—a toxic mix for cyclical stocks.
• Partisan divides and legal battles will keep Congress gridlocked, delaying pro-growth policies.
• Young and diverse voters are abandoning him, signaling long-term brand and consumer risks.

Investors should prioritize defensive sectors like utilities and healthcare, which have outperformed by 5–7% since January, and short-cycle tech stocks insulated from trade wars. Meanwhile, avoid sectors tied to tariffs or government contracts, as regulatory and economic headwinds loom.

The markets have spoken: this isn’t just a political storm—it’s an investment one.

Conclusion: With Trump’s approval ratings at record lows and economic confidence evaporating, the next 12 months will test investor resilience. The data is unequivocal: bet on stability, not speculation. As the old adage goes, “Don’t fight the tape”—and the tape is screaming caution.

The bond market has already priced in slower growth. It’s time to follow its lead.