Euphoria Over Trump's Looming Distress

Eases and Complacency About the Risks of Recession

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Billionaire Michael Dell and Pfizer's Albert Bourla, CEOs assembled in the room, responded with a mix of groans and shocked laughter after it was announced that Trump was considering doubling tariffs on steel and aluminum from Canada.

Lofty stock prices and steady income growth have been critical engines of the economic expansion in the past few years. A market rout could make the U.S. economy wheeze if it leads high-income consumers to pull back spending.

Investors shuddered earlier this month when the Trump administration dialed up tariff threats and then signaled complacency about recession risks. "Here's the interesting thing about the stock market: it cannot be indicted, arrested or deported; it cannot be intimidated, threatened or bullied," wrote JPMorgan's Michael Cembalest in a report on March 12 that was forwarded across Wall Street trading desks.

Looking for M&A boom. Dealmakers and finance chieftains were among the most excited for Trump.

Last October, before the election, Marc Rowan, CEO of Apollo Global Management, told a crowd in Saudi Arabia the Biden administration had been detrimental to deals. "I think there's an absolute chill on M&A activity as a result of current policy, and I think you will see it freed up if there is a change in regime," Rowan said.

Deal volume in the U.S. is down 0.7% this year to March 24 compared with the time period last year, according to data from London Stock Exchange Group, a far cry from the surge in activity anticipated by business leaders. Excluding Google-parent Alphabet's $32 billion acquisition of cybersecurity startup Wiz, deal volume is down more than 9% from the previous year.