Treasury Secretary Bessent says market woes are more about tech stock sell-off than Trump’s tariffs
Treasury Secretary Scott Bessent has weighed in on the recent stock market sell-off, attributing the downturn more to a sharp pullback in major technology stocks rather than the protectionist policies implemented by the Trump administration. In a recent interview on Bloomberg TV, Bessent emphasized that the decline, particularly in the Nasdaq, was a result of Chinese AI startup DeepSeek’s new language models causing upheaval in U.S. tech stocks.
The emergence of DeepSeek’s competitive and potentially more cost-effective models raised concerns about the substantial investments made by leading U.S. tech companies in artificial intelligence. This led to a significant sell-off in the so-called Magnificent 7 stocks, including Apple, Amazon, Tesla, Alphabet, Microsoft, Meta, and Nvidia, ultimately pulling the Nasdaq Composite into correction territory with a 13% drop from its previous peak.
Despite the market turbulence, Bessent downplayed the impact of President Trump’s recent tariff policies, which triggered fears of inflation, slower economic growth, and a potential recession. The abrupt imposition of “reciprocal tariffs” at the White House resulted in a substantial overnight sell-off, with the S&P 500 futures plummeting nearly 4% and the Dow Jones Industrial Average shedding 1,100 points.
In a separate interview on Fox, Bessent reassured investors, stating that the market downturn was primarily driven by the tech sector’s unique circumstances rather than broader economic conditions. He highlighted that the stock market actually peaked following DeepSeek’s AI announcement, indicating that the recent sell-off was more of an idiosyncratic event within the tech industry.
As the market continues to navigate through uncertainties, Bessent remains optimistic, emphasizing the importance of establishing favorable economic conditions to support market stability. With ongoing developments shaping the investment landscape, investors are closely monitoring the evolving market dynamics to make informed decisions in the ever-changing financial environment.
Overall, Bessent’s insights shed light on the intricate factors influencing market movements and underscore the significance of staying attuned to developments that can impact investment strategies. As the market landscape evolves, investors and stakeholders are encouraged to remain vigilant and adapt to changing market conditions to navigate through volatility and seize opportunities for long-term growth and prosperity.
