The second Trump administration has begun on an unexpectedly sluggish note for Wall Street.
Optimistic projections of an M&A boom, regulatory rollbacks, and a business-friendly White House have yet to materialize. Instead, January marked the slowest month for U.S. dealmaking in over a decade, with LSEG data showing the lowest number of announced mergers and acquisitions since 2014. The administration’s early moves have introduced uncertainty rather than the anticipated golden era for finance.
Trump’s new antitrust regulators made their presence known quickly by blocking a proposed merger between Hewlett Packard (HPE) and Juniper Networks (JNPR), signaling that large-scale consolidations won’t be given an easy pass. Compounding concerns are unclear tariff policies that have left executives hesitant to pull the trigger on major investments. The result? A cautious approach to dealmaking as businesses wait for clearer guidance.
Meanwhile, the White House has revived discussions around closing the carried interest loophole—a move that would significantly impact private equity and hedge fund executives. The proposal, long opposed by the finance industry, could mean higher tax bills for investment managers, shaking up a system that has been in place for years. With Trump’s own party divided on the issue, it remains unclear whether this push will gain traction, but its very mention has caused unease in financial circles.
For CEOs and investors alike, Trump’s second term is proving to be anything but predictable. While Wall Street had braced for disruption, the reality is a mix of opportunity and risk. Whether the administration will ultimately deliver the pro-business environment many expected remains to be seen.
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Trump’s new antitrust regulators made their presence known quickly by blocking a proposed merger between Hewlett Packard (HPE) and Juniper Networks (JNPR), signaling that large-scale consolidations won’t be given an easy pass. Compounding concerns are unclear tariff policies that have left executives hesitant to pull the trigger on major investments. The result? A cautious approach to dealmaking as businesses wait for clearer guidance.
Political Heat and Policy Surprises
Wall Street’s wariness isn’t just about slow dealmaking—it’s also about unexpected confrontations. At the World Economic Forum in Davos, Trump publicly rebuked Bank of America (BAC) CEO Brian Moynihan over allegations that the bank had "debanked" conservative customers. JPMorgan Chase (JPM) CEO Jamie Dimon was also called out, adding to the tension between the administration and the financial sector. Both institutions denied the claims, but the spectacle served as a stark reminder that Trump’s unpredictable nature can bring unexpected scrutiny.
Wall Street’s wariness isn’t just about slow dealmaking—it’s also about unexpected confrontations. At the World Economic Forum in Davos, Trump publicly rebuked Bank of America (BAC) CEO Brian Moynihan over allegations that the bank had "debanked" conservative customers. JPMorgan Chase (JPM) CEO Jamie Dimon was also called out, adding to the tension between the administration and the financial sector. Both institutions denied the claims, but the spectacle served as a stark reminder that Trump’s unpredictable nature can bring unexpected scrutiny.
Meanwhile, the White House has revived discussions around closing the carried interest loophole—a move that would significantly impact private equity and hedge fund executives. The proposal, long opposed by the finance industry, could mean higher tax bills for investment managers, shaking up a system that has been in place for years. With Trump’s own party divided on the issue, it remains unclear whether this push will gain traction, but its very mention has caused unease in financial circles.
Market Optimism Amidst Uncertainty
Despite these challenges, bank stocks have outperformed major indexes in early 2025. JPMorgan Chase, Goldman Sachs (GS), Citigroup (C), and Wells Fargo (WFC) have all seen gains between 12% and 15%, while Bank of America and Morgan Stanley have posted smaller but still positive returns. Some investors still believe in the "Trump put"—the idea that if markets falter, Trump will adjust policies to stabilize them. However, with rising geopolitical tensions, an evolving regulatory landscape, and potential policy reversals, the financial sector remains in a state of cautious optimism.
Despite these challenges, bank stocks have outperformed major indexes in early 2025. JPMorgan Chase, Goldman Sachs (GS), Citigroup (C), and Wells Fargo (WFC) have all seen gains between 12% and 15%, while Bank of America and Morgan Stanley have posted smaller but still positive returns. Some investors still believe in the "Trump put"—the idea that if markets falter, Trump will adjust policies to stabilize them. However, with rising geopolitical tensions, an evolving regulatory landscape, and potential policy reversals, the financial sector remains in a state of cautious optimism.
For CEOs and investors alike, Trump’s second term is proving to be anything but predictable. While Wall Street had braced for disruption, the reality is a mix of opportunity and risk. Whether the administration will ultimately deliver the pro-business environment many expected remains to be seen.
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