Is Donald Trump crashing global markets on purpose? What we know so far
US President Trump's sweeping tariffs have triggered a global market meltdown, with speculation mounting over whether he's crashing markets deliberately to pressure the Fed. Experts warn of recession risks, inflation, and severe economic instability.
Global equity markets are in freefall, and the turmoil appears to have one major trigger: sweeping new US tariffs announced by President Donald Trump. The impact has been immediate and brutal. From Wall Street to Dalal Street, investors are witnessing one of the sharpest selloffs in years, and now a viral theory has added fuel to the fire—is Trump crashing markets on purpose?
A brutal global meltdown
On Monday, Indian markets opened to a bloodbath. The BSE Sensex plunged 3,939.68 points (5.22%) to 71,425.01, and the Nifty 50 dropped 1,160.8 points (5.06%) to 21,743.65. Every stock on the Sensex closed in the red. Tata Steel led the decline, down over 8%, followed by Tata Motors, HCL Tech, Infosys, and Reliance.
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Asian markets fared even worse. Japan's Nikkei 225 fell over 8%, the Hang Seng lost nearly 10%, and South Korea's Kospi fell so steeply it triggered a circuit breaker. Taiwan and Shanghai also saw losses of over 6%. In the US, the S&P 500 lost nearly 11% over two trading sessions, wiping out trillions in value.
The tariff shock
The immediate cause: President Trump has announced a sweeping tariff regime targeting virtually all US trading partners, including allies like Japan, Israel, and the European Union. A blanket 10% import tariff came into force on Saturday, with "reciprocal" tariffs—some as high as 50%—set to take effect Wednesday.
Countries have started to retaliate: China has imposed a 34% duty on US goods. Vietnam, hit with a 46% tariff, is requesting a negotiation window. Israel has announced emergency talks with the US. Trump, however, remains unmoved. Over the weekend, he told reporters: "They are coming to the table. They want to talk, but there's no talk unless they pay us a lot of money on a yearly basis."
Also read: Trump's tariff push threatens India's 2025 US export growth: GTRI forecasts 6.41% fall
The viral conspiracy theory
In the middle of this economic storm, Trump reshared a controversial video from a fringe TikTok account on his Truth Social platform. The video claimed, without irony, that Trump is "crashing the market on purpose" as a strategy to force the US Federal Reserve to slash interest rates.
According to the theory, by tanking the markets, Trump hopes to drive down Treasury yields, making it cheaper to refinance the $36 trillion US debt. Treasury yields did drop after the crash, with the 10-year note hitting a six-month low under 3.9%.
Trump seemed to echo the sentiment, telling reporters on Air Force One: "I don't want anything to go down. But sometimes you have to take medicine to fix something."
Debunking the myth
Despite its viral reach, the theory is riddled with misinformation. The video falsely claimed Warren Buffett supports Trump’s economic agenda. Buffett’s firm, Berkshire Hathaway, has outright denied this. In fact, Buffett has previously called tariffs "an act of war" and warned they are ultimately a tax on American consumers.
The video also suggested that stock market losses only affect the rich, citing that 94% of stocks are held by 8% of Americans. While technically accurate, this ignores that many middle-class Americans are exposed to the markets through retirement accounts. A stock market crash impacts far more than just billionaires.
The Fed factor
Trump also tagged the Federal Reserve, urging Chair Jerome Powell to cut rates. Powell has pushed back, warning that the size and scope of the tariffs are larger than expected and pose a risk of higher inflation and slower growth.
While Trump and his allies insist they are not pressuring the Fed, the rhetoric and timing of the video suggest otherwise. Market observers say the pressure is clear.
Experts speak
Market voices are increasingly sounding the alarm:
Bill Ackman, hedge fund billionaire: Warned of an "economic nuclear winter" if tariffs aren’t scaled back.
Karen Jorritsma, RBC: "Trump got us into this. But what can get us out?"
Robert Pavlik, Dakota Wealth: "People are afraid the worst is yet to come."
Charu Chanana, Saxo: "The lack of any policy response... volatility is likely to stay elevated."
Aninda Mitra, BNY: "Until there is greater visibility in bilateral negotiations... volatility may stay."
Congress is now discussing bipartisan efforts to curb presidential tariff powers. Several Republicans have expressed concern about the economic fallout. JP Morgan has raised the risk of a US recession to 60%, projecting a 0.3% GDP contraction in 2025.
Also read: Stock markets crash: China, Japan, Hong Kong and Taiwan markets top losers. Is India still better?
Fed officials, though politically cornered, are unlikely to move abruptly. Powell maintains that inflation is still a concern, and rate cuts could worsen the situation.
Whether the market crash is part of a deliberate strategy or simply a case of overreaching economic policy, one thing is clear: global markets are reeling. Trump's actions—and his endorsement of fringe theories—are raising serious questions about economic stability and the politicization of monetary policy. Investors, meanwhile, are left bracing for more pain ahead.
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