It gets even worse in the US equity market as the ‘detox’ selloff continues. NQ down 4%

Last week, US Treasury Secretary Scott Bessent had this to say on CNBC:

“There’s going to be a natural adjustment as we move away from public
spending to private spending; the market and the economy have just
become hooked. We’ve become addicted to this
government spending, and there’s going to be a detox period.”

The talking heads on TV are now calling it the ‘detox selloff’ and it touches on a deeper point: Is there a Trump put?

It took more than 800 days into Trump’s first term to see even a 1% opening gap in the market and we’ve had three of them so far in 2025. His deputies are talking about main street success at the expense of wall street. That’s the kind of thing you expect in an election but Trump was a major backer of the stock market in his first term and market participants are grappling with the possibility that’s changed.

The S&P 500 is down 2.4% today and the Nasdaq down nearly 4%. It’s an ugly turn that has tech stocks well below where they were pre-election.

Now I would argue that some of that is the ebb and flow of the AI hype cycle but perception can become reality and bearishness can spread to the economy, just like it did in the tech bust in 2000.

Ultimately, there is a Trump put, it’s just a matter of how hard the market needs to kick and scream before it goes into effect. So far, 10% in the Nasdaq hasn’t done it and today it’s hit 15%. A drop to 16,163 would market a 20% decline and that would be near the August spike low.

Would that be enough of a message to get Congress to cool the trade war? Or to pass the tax cut?

This article was written by Adam Button at www.forexlive.com.