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Trump’s Market Playbook: What Measures Might He Take to Calm Wall Street Now?

August 3, 2025 By Analysis.org

As August opens with a storm of volatility, all eyes are on President Trump—not just for the tariffs he’s unleashed, but for what he might do next to soothe jittery investors. Friday’s devastating jobs report, revealing just 73,000 new positions in July and downward revisions to prior months, ignited a broad market sell-off. Overlay that with fresh tariff hikes scheduled for August 7 and it’s no surprise that the Dow tumbled over 500 points, while the Nasdaq suffered its worst weekly decline since May. The question now is not whether Trump will act, but how—and how convincingly.

Historically, Trump has demonstrated a deep instinct for capital markets, treating Wall Street not as an abstract barometer of economic health but as a daily referendum on his leadership. When markets fall, he gets nervous. When they rally, he takes credit. This feedback loop has led to a signature strategy: bold, theatrical moves—ranging from policy pivots to tweetstorms—aimed at recapturing investor confidence and restoring a narrative of control.

His first and most immediate lever is jawboning. Expect tweets in all-caps proclaiming that “AMERICA IS WINNING” and that the tariffs are part of a master plan. Simultaneously, Trump is likely to pivot toward blaming the Federal Reserve, demanding interest rate cuts, and calling Fed officials “slow” or “clueless” if they hesitate. By framing the downturn as a result of weak Fed policy rather than his own tariffs, he positions himself as the solution rather than the source of uncertainty. We’ve already seen signs of this: his abrupt firing of the BLS commissioner and the sudden resignation of Fed Governor Kugler are early moves in what could become a broader reshaping of the central bank’s leadership.

Second, Trump may use the tactic of selective tariff relief to placate markets while saving political face. If investor anxiety continues to spike, he could carve out temporary exemptions for strategically sensitive sectors—semiconductors, autos, agriculture—and portray it not as a retreat, but as a “smart tactical adjustment.” Investors know the pattern: Trump often rolls out aggressive threats, watches the market’s reaction, and then softens or delays implementation to avert political and economic blowback. Any such shift in tone would likely be accompanied by renewed talk of “historic” trade deals just over the horizon, whether or not substantive progress is being made behind closed doors.

Another likely channel is fiscal stimulus. Trump has long favored visible, tangible economic gestures, and the market could be buoyed by announcements around new infrastructure funding, tax rebates, or expanded government procurement—especially for swing-state industries like defense and manufacturing. Even without Congressional approval, signals from the executive branch can shape market expectations, especially if amplified by Fox Business segments and rally rhetoric.

Regulatory rollback is another powerful—and fast—tool in Trump’s kit. If equities remain under pressure, we can expect executive orders aimed at eliminating regulations perceived as costly to business, particularly in energy, banking, and industrials. He’s done it before, and in an election cycle, he’s likely to do it again. Loosening restrictions on fossil fuel production, financial reporting requirements, or environmental compliance could offer immediate sector-specific boosts and signal a pro-growth posture without needing new legislation.

Finally, geopolitical theater remains one of Trump’s most unpredictable but potent levers. In past years, we’ve seen him use foreign relations as both a cudgel and a balm. He might suddenly signal a de-escalation with China, offer to meet with adversaries like North Korea, or even shift energy policy in coordination with OPEC+ to calm inflation fears. These moves are less about the underlying diplomacy and more about controlling the market’s narrative—restoring the sense that he, and he alone, is managing the chaos.

But the effectiveness of these strategies is no longer guaranteed. Unlike the early Trump years, investors in 2025 are savvier, warier, and more focused on fundamentals than flash. The credibility gap is widening. If market participants begin to see these maneuvers as hollow or politically motivated, the relief may be short-lived. And if tariffs stay on course, the Fed remains cautious, and the labor market continues to weaken, even a fully armed Trump playbook may not be enough to stop a deeper correction.

Still, one thing remains certain: Trump will not sit idly by as markets fall. The coming weeks are likely to bring a cascade of announcements, threats, walk-backs, and performative policy gestures. Whether those moves will steady the markets or further stoke volatility depends on whether they’re seen as real solutions—or just noise.

Filed Under: Briefing

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