Opinion | Trump’s executive orders will be no match for markets in grip of fear

Investors’ behaviour promises to thwart Trump’s economic agenda, just as they have forced past administrations to scramble for rescues

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Published: 4:30pm, 28 Mar 2025

The sharp fall in US share prices underscores why financial markets will be US President Donald Trump’s greatest nemesis.

Recession fears are back in play amid aggressive, stop-start trade wars which economists increasingly forecast will rekindle inflation. Investors’ behaviour promises to thwart Trump’s agenda, just as they have forced past administrations to scramble for rescues during the dotcom bubble bust and the global financial crisis.

Executive orders, admonishments, arm-twisting and social media campaigns by the White House will eventually prove powerless against the emotions and cognitive biases that influence securities markets. Our beliefs create the outcome we expect to see. We blindly trust intuition and believe in our infallibility – these are some pitfalls that plague decision-making.

Economic policies affect how we save, invest and spend our money. They also have an impact on our emotions, which in turn influences our decisions. For companies, the fear of incalculable turmoil can postpone or disrupt investment plans that generate dividends and jobs. Experience-based beliefs, however distorted, can supplant rationalism.

Uncertainty over Trump’s policies has spooked markets and unnerved investors. According to Google Trends, interest in the term “recession” in the United States surged nearly tenfold between February 9 and March 9.

It’s hard to find meaningful information buried deep in the ocean of irrelevant data. As Marc Lasry, the billionaire co-founder of Avenue Capital Group, put it earlier this month: “The problem for the markets is when they don’t know what to do. An economy can’t survive like that. It just slows everything down and could push this economy into a recession.”