Stocks don’t need the Trump bump anymore

Trump NYSEDeveloper Donald Trump poses for photos outside the New York Stock Exchange after the listing of his stock on Wed., June 7, 1995 in New York.AP Photo / Kathy Willens

Does the stock market even need the Trump trade anymore?

Merely posing such a question may strike some equity enthusiasts as blasphemy. After all, in the months right after the presidential election, the sectors seen as most closely tied to President Donald Trump’s proposed policies — most notably financials and industrials — soared.

But an interesting wrinkle has formed. Whenever one of the plentiful negative Trump headlines hits news wires, investors are mostly unshaken. A prime example came this past week, when Trump came under the most scrutiny yet, spurring the biggest drop in US stocks since months before the election — a decline that was largely erased in just two days.

That wasn’t the first piece of news seen as a potential threat to Trump’s economic agenda, and it certainly won’t be the last. Yet here we sit, about 1% from another new record for US stocks.

It’s introduced an idea that would’ve seemed far-fetched mere months ago: that while Trump’s election victory undoubtedly boosted stocks on a short-term basis, market conditions are more than capable of supporting current valuations on their own.

“If the Trump administration disappeared or got beamed into space, I don’t think the market would plummet,” Michael Antonelli, an institutional equity sales trader and managing director at Robert W. Baird & Co. in Milwaukee, said in a phone interview. “The immediate post-election rally was partially composed of optimism around Trump, but a lot of the sustained strength is due to good, old-fashioned data. People are forgetting that the stock market is more than just the actions of the president. “

Here’s a breakdown of three themes supporting the idea that stock market would be just fine without the Trump trade:

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