US Treasury chief Bessent: stock market drop a ‘Mag 7’ problem, not a Maga one

The stock market plunge has more to do with the emergence this year of China’s DeepSeek artificial intelligence (AI) tool than with President Donald Trump’s policies, US Treasury Secretary Scott Bessent said in an interview released on Friday that signalled little concern about the ongoing nosedive.

“For everyone who thinks these market declines are all based on the president’s economic policies, I can tell you that this market decline started with the Chinese AI announcement of DeepSeek,” Bessent told conservative commentator Tucker Carlson.

“If I were to analyse in my old hat, and this is the only time I’m going to talk about it … what’s happening with the market I’d say it’s more a Mag 7 problem, not a Maga problem,” said Bessent, who ran a hedge fund until being tapped as Treasury secretary by Trump.

“Mag 7” refers to the shares of the so-called Magnificent 7 – a group of seven high-performing tech stocks that had helped drive the market higher before its recent sell-off. Maga refers to Trump’s “Make America Great Again” political slogan.

It is a drop that market analysts and large investors themselves have laid at the feet of Trump’s aggressive push on tariffs, which most economists and the head of the Federal Reserve believe risk stoking inflation and damaging economic growth.

Stocks did take a hit in late January when Chinese start-up DeepSeek launched a new AI model that was developed at a fraction of the cost of incumbent services. It resulted in a record one-day loss of nearly US$600 billion in value from the shares of AI chipmaker Nvidia, one of the Magnificent 7.