Confidence in the US stock market has plunged as investors take fright at Donald Trump’s trade wars and turn their focus towards Britain and Europe.
Figures from UK investment platform Hargreaves Lansdown have illustrated the sharp change in sentiment as the ‘Trump bump’ turns into the ‘Trump slump’.
The report showed investors’ confidence in North America has slid by 17 per cent this month while increasing dramatically in Europe – by 48 per cent – and in the UK – by 16 per cent.
Trump’s election in November saw markets surge on hopes that tax cuts and deregulation would boost US firms.
But the US President has imposed swingeing tariffs affecting China, Mexico and Canada, sparking retaliation and raising fears of surging US inflation and even a recession.
A drive led by Trump’s ally Elon Musk to slash public spending and government jobs also threatens to weigh on the economy.
Tariff tiff: US President Donald Trump has imposed swingeing tariffs on China, Mexico and Canada, sparking retaliation and raising fears of surging US inflation and even a recession
And the almost daily diet of hair-raising policy announcements has put markets even more on edge. Victoria Hasler, head of fund research at Hargreaves Lansdown, said: ‘Clients’ investor confidence took a dramatic U-turn in March.
‘Confidence in North America, previously the most-loved area by investors, plummeted by 17 per cent as HL investors baulked at the impact that some of the new President’s policies appear to be having on markets and sought diversification elsewhere.
Unlike the US, both the UK and Europe are on an upward path.’
It came as Trump yesterday threatened to impose 200 per cent tariffs on European wine, champagne and spirits after the EU’s announcement a day earlier of duties on £22billion worth of US exports including American whiskey – which was itself in retaliation for Trump’s global levy on steel and aluminium.
Markets in Europe gave up early gains after Trump’s latest comments, with London’s FTSE 100 closing just slightly higher at 8542.56. Germany’s Dax fell 0.5 per cent and France’s Cac 40 by 0.6 per cent.
In New York, the Dow Jones and S&P 500 indexes were both down by more than 1 per cent and the Nasdaq by 1.6 per cent.
US stocks have underperformed European counterparts in 2025 with the S&P 500 6 per cent lower to date and the Nasdaq down 10 per cent while the FTSE is up more than 4 per cent and the Dax more than 13 per cent.
While the US has been stalked by fears of a ‘Trumpcession’, Europe has been rallied by the promise of a massive boost in military spending.
Trump appears to be less worried than he has been in the past about upsetting markets.
Yesterday, US Treasury Secretary Scott Bessent called Wall Street’s volatility a ‘detox’. Asked if that would spell recession, he told US broadcaster CNBC: ‘Not at all. It doesn’t have to be.’
But Michael Strobaek, global chief investment officer at Lombard Odier, said: ‘With Europe agreeing to unleash fiscal power, capital has rushed towards the continent, and the US is no longer the only game in town.’
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