Treasury Secretary Scott Bessent speaks to reporters outdoors the West Wing after doing a tv interview on the North Garden of the White Home on March 13, 2025 in Washington, DC.
Andrew Harnik | Getty Photos
Treasury Secretary Scott Bessent mentioned Wednesday the sell-off within the inventory market is due extra to a pointy pullback within the largest know-how shares as an alternative of the protectionist insurance policies coming from the Trump administration.
“I am attempting to be Secretary of Treasury, not a market commentator. What I might level out is that particularly the Nasdaq peaked on DeepSeek day in order that’s a Magazine 7 drawback, not a MAGA drawback,” Bessent mentioned on Bloomberg TV Wednesday night.
Bessent was referring to Chinese language AI startup DeepSeek, whose new language fashions sparked a rout in U.S. know-how shares in late January. The emergence of DeepSeek’s extremely aggressive and probably less expensive fashions stoked doubts concerning the billions that the massive U.S. tech corporations are spending on AI.
The so-called Magnificent 7 shares — Apple, Amazon, Tesla, Alphabet, Microsoft, Meta and Nvidia — began promoting off drastically, pulling the tech-heavy Nasdaq Composite into correction territory. The tech-heavy benchmark is down about 13% from its file excessive reached on December 16.
Nevertheless, the secretary downplayed the influence from President Donald Trump’s steep tariffs, which caught many traders off guard and fueled fears of a re-acceleration in inflation, slower financial development and even a recession. Many traders have blamed the tariff rollout for driving the S&P 500 briefly into correction territory from its file reached in late February. Wall Road defines a correction as a drop of 10% from a latest excessive.
S&P 500, YTD
Trump signed an aggressive “reciprocal tariff” coverage on the White Home Wednesday night, slapping duties of at the least 10% and even larger for some international locations. The actions sparked an enormous sell-off within the inventory market in a single day, with the S&P 500 futures declining almost 4% and the blue-chip Dow Jones Industrial Common shedding 1,100 factors. The losses will doubtless however the S&P 500 again into correction territory in Thursday’s session.
“It may be advantageous if we put the perfect financial circumstances in place,” Bessent mentioned in a separate interview on Fox Wednesday night. “In the event you return and look, the inventory market truly peaked on the [DeepSeek] Chinese language AI announcement. So plenty of what we now have seen has been simply an idiosyncratic tech sell-off.”