The US stock market has had a bumpy ride since United States President Donald Trump’s election in November.
After hitting record highs in the aftermath of Trump’s victory, US stocks have shed trillions of dollars amid his dizzying back-and-forth announcements on tariffs and growing fears of a recession.
While Trump has played down the turbulence as a temporary “period of transition” on the road to a stronger economy, supporters and critics of the US president alike have speculated without evidence that he may be trying to crash the stock market on purpose.
What is happening with the US stock market?
Trump’s vacillating economic policies have created uncertainty – something investors famously dislike.
The benchmark S&P500, which tracks the performance of 500 of the biggest US firms, has lost nearly $5 trillion in value from its February 19 peak.
On March 10, the tech-heavy Nasdaq fell 4 percent – its worst single-day drop since September 2022.
Regardless of whether Trump is playing the long game as he claims, the past month “stands out for both the amount of uncertainty and the variety of fronts”, Tara Sinclair, director of the George Washington University Center for Economic Research, told Al Jazeera.
The Economic Policy Uncertainty Index, which the Federal Reserve Bank of St. Louis produces based on news coverage of economic policy-related issues, in February hit its highest level since the height of the COVID-19 pandemic in 2020.
The Global Economic Policy Uncertainty Index in January reached its highest point on record apart from May 2020.
Why are some people claiming that Trump wants to crash the stock market?
There are several unsubstantiated theories about why Trump might want to crash the stock market, but chief among them is that he is trying to make it easier to pay off the US’s $36 trillion national debt by lowering interest rates.
Since taking office, Trump has both expressed concern about the size of the debt and called on the Federal Reserve to lower interest rates.
In a recent interview with FOX News, he claimed that “nobody ever gets rich when the interest rates are high, because people can’t borrow money.”
With a debt to gross domestic product (GDP) ratio of about 120 percent, the federal debt is approaching its highest level since the end of World War II.
It is also expensive to pay off – the US government last year spent more than $1 trillion on interest payments alone.
Some Trump supporters have claimed that he is intentionally trying to induce economic pain to force the Federal Reserve to lower interest rates, which would make it cheaper to refinance the national debt.
“Trump is setting up a stock market crash. The US government needs to refinance $7 trillion in debt over the next 6 months,” crypto influencer and investor Thomas Kralow, who has