After an interview outside the White House on a brisk March day, Treasury Secretary Scott Bessent shared some insights that are making waves in the financial community. Speaking to reporters, Bessent addressed the recent downturn in the stock market, attributing it primarily to a slump in major tech stocks rather than the Trump administration’s protectionist measures.
“I’m more focused on my role as Treasury Secretary than playing market commentator,” Bessent mentioned on Bloomberg TV that evening. He noted that the Nasdaq reached a peak on what he called “DeepSeek day,” suggesting this is more of a “Mag 7 problem” — a reference to the ‘Magnificent 7’ tech stocks — rather than anything related to President Trump’s policies.
The crux of the issue seems to lie with a Chinese AI startup named DeepSeek. Their introduction of groundbreaking, cost-efficient language models in January triggered upheaval among U.S. tech giants, raising questions about the enormous sums these companies are investing in AI. Consequently, heavyweights like Apple, Amazon, and Tesla have seen their stocks tumble, leading the tech-driven Nasdaq Composite down by about 13% from its previous heights in December.
Despite these shifts, Bessent downplayed concerns over Trump’s recently imposed tariffs, which startled many investors and stirred fears of resurging inflation and economic slowdown. Some blamed these tariffs for briefly pushing the S&P 500 into correction territory after reaching a high in February. For context, a market correction is typically defined as a 10% drop from a recent peak.
On Wednesday evening, at the White House, Trump unveiled an assertive “reciprocal tariff” strategy, introducing duties starting at 10% for various countries. Overnight, this move triggered a significant market dip, with S&P 500 futures plunging nearly 4%, and the Dow Jones Industrial Average took a 1,100-point hit. These developments suggested the S&P 500 might re-enter correction territory in the next day’s trading.
Yet, Bessent remained optimistic, declaring in a separate Fox interview, “We’ll be fine if we establish strong economic conditions.” He reiterated the point that the market’s troubles began with the DeepSeek announcement, framing the issue as a unique tech setback rather than a broader economic challenge.
