by Daniel Brouse
April 9, 2025
At this point, I wouldn’t pay much attention to the stock market. The bond market has effectively become what some are calling the “Trump Put” — a term that suggests Trump will only alter his damaging policies when the pain from a market collapse becomes too severe. That’s essentially what happened today, as a sharp reaction in the bond market forced a pause in his reckless policy-making. However, this is merely an indicator of the kind of knee-jerk reactions we can expect from Trump in the future. Unfortunately, the stock market is no longer a reliable indicator of overall economic health.
The truth is, much of the economic damage has already been done, and the fallout continues to worsen despite any attempts at intervention. The ripple effects of the Trump administration’s policies are visible across various sectors, and they are causing long-term harm to the economy. A clear example of this can be seen in Microsoft’s recent decision to cancel its $1 billion data center project in Ohio. The tech giant had initially committed to the development as part of its efforts to expand its cloud infrastructure, but the escalating uncertainty around tariffs and trade policies made the investment untenable.
This cancellation is far from an isolated incident. Companies across industries are pulling back on capital expenditures (CapEx) as they deal with the volatility created by these policies. For example, automakers are delaying or scrapping plans to expand production in the U.S. due to rising material costs from tariffs on steel and aluminum. Many manufacturers are cutting back on factory upgrades and hiring freezes, as uncertainty about future trade relations with key partners like China and Europe looms large.
Retailers, too, are feeling the squeeze. Large retail chains, which were already grappling with declining foot traffic and shifting consumer behavior, are now having to rethink expansion plans due to supply chain disruptions and the growing cost of imports. In addition to scaling back on new store openings, some are halting infrastructure investments, such as distribution centers and technology upgrades, as their financial outlook worsens.
The real estate sector is also suffering. Construction projects across the country have been delayed or canceled as developers face rising costs for materials like lumber and steel — costs driven up by tariffs. The uncertainty surrounding trade agreements and the broader economic landscape has led to a slowdown in both commercial and residential real estate development. High-profile projects, including those planned for large metropolitan areas, are now on hold indefinitely, as developers and investors await clearer signals from Washington.
This widespread reduction in CapEx is a clear indicator of the long-term economic damage caused by policies that prioritize short-term political gain over long-term stability. Companies aren’t just scaling back; they are actively preparing for an unpredictable future where market conditions could remain volatile. As this domino effect continues, it’s likely we will see even more industries scaling back their investments, further exacerbating the economic decline.
In short, while the stock market may see short-term corrections and rallies, the underlying damage to the economy continues to unfold. Corporate America is reacting with caution, and the full scope of the consequences is likely to play out over the coming months and years. The Trump administration’s approach to economic management has left a trail of uncertainty that companies are not willing to ignore. The impact of these decisions will likely be felt for much longer than the stock market’s momentary shifts suggest.