Will the Trump Put Be Enough to Stop the Bleeding?

The last few days have been a bloodbath across global markets, triggered by Trump’s new trade tariffs. If you’ve been tuning into market chatter, you’ve probably heard the term “Trump Put” being thrown around, but what does it actually mean?

The “Trump Put” is a term used by traders to describe the idea that Trump will step in and do whatever it takes to stop the stock market from crashing when things get ugly. That could mean pulling back on tariffs, pressuring the Fed to cut interest rates, pushing for tax cuts, or even just tweeting something upbeat to calm the market. It’s basically seen as a safety net for investors.

The term comes from a “put option” in finance, which acts like insurance by limiting how much you can lose. So when people talk about a Trump Put, they’re saying, “Don’t panic Trump will make a move to stop the bleeding.” But will this actually happen? We almost saw it happen last night. Markets were in freefall until a false rumour hit trading screens saying Trump might delay the tariffs. Within minutes, markets bounced hard, even without confirmation. That’s the power of the Trump Put. Just a whisper of good news and the market jumps.

However, this sort of a Trump Put, is short term. Right now, Trump has slapped tariffs on over 90 countries, mainly targeting China and the EU. But according to Fox News, more than 50 countries have already reached out to negotiate. Japan has even sent their top team to Washington.

While Trump says exemptions are unlikely, the pressure is clearly mounting. Soon, markets will become oversold. And when that happens, all it might take is one tweet, one meeting, or one headline to spark a sharp rebound. That’s what we’re watching for.

And don’t forget, if the Fed steps in to cut rates, that’s another catalyst that could lift markets out of this mess. Right now, the odds of the Fed cutting interest rates five times this year have jumped from 18.3% to 37.9%.

At the time of writing, the Australian market is up over 2% on news that Japan is preparing to negotiate with Trump, while China says it will fight to the end if the US keeps escalating. The Shanghai/Shenzhen Composite is up 0.8%, Hong Kong’s Hang Seng is up 2%, and Japan’s Nikkei is up over 6%.

Short version?

Stay sharp. The storm isn’t over . Yes, there will be sharp bounces that you can trade, but the damage to investor confidence has been done, and rebuilding that takes time and stability, not a flip-flop of tariff decisions.

Ishan