Wall Street seemed to take heart from National Economic Council director Larry Kudlow’s calming words in a Fox Business Network interview during his first week on the job, and the market turned itself around. The Dow Jones Industrial Average rallied more than 700points from the day’s low.
That trust looked misguided a day later, when Trump - seemingly unbeknown to Kudlow - said that he had instructed an additional $100bn of tariffs to be imposed on Chinese goods.
Equities swooned again, with the Dow dropping roughly 600points.
It wouldn’t be the first time that traders and investors got caught out by a seeming 180-degree turn on Trump policy, but Wall Street may have to get far more selective in terms of which statements, and from whom, they listen to.
“More typically, there’s a lot more cohesion in the messaging between the White House and the markets,” said Nicholas Colas, co-founder of DataTrek Research.
“Certainly this administration is taking an entirely different tack. It’s been much more volatile in trying to understand what they’re trying to tell us.”
With rapid turn-about in the White House a regular occurrence, investors have made costly decisions based on the words of a rotating door of advisers and policymakers.
Peter Tuz, president of Chase Investment Counsel in Charlottesville, Virginia, said there was some “good cop, bad cop action” between the president and advisers. “Obviously you listen to them both and you hope cooler heads eventually prevail,” said Tuz.
A similar to-and-fro has played out with the dollar. US Treasury Secretary Steven Mnuchin said in January that he welcomed a weaker currency, Trump said he wanted to see a strong dollar, and then Kudlow in March said he would like the greenback a “wee bit stronger than it is currently”.