U.S. stock market crashes after Trump tariffs: It’s MAG-7, not a magazine issue: Treasury Secretary Scott Bessent mocks investors, saying Wall Street’s Wipeout was due to DeepSeek Leed Leed AI bubble, not Donald Trump’s tariffs
It looks like a classic case of market response to political risks. But Treasury Secretary Scott Bessent has a different view on this. He pointed out everything else: the technology department’s obsession with artificial intelligence.
What does DeepSeek have to do with stock crashes?
According to Bessent, the root of the problem lies in MAG-7– That is, the seven major tech stocks: Yuan, Apple, Google, Amazon, Microsoft, Nvidia and Tesla. These stocks are valuable after they are issued DeepSeekChina’s powerful open source AI model, back in January.
Bessent explained in a Bloomberg TV interview “Nasdaq peaked at DeepSeek Day. It’s a MAG-7 issue, not a Maga issue.”
In other words, the valuation of AI hype is too fast, and what we are seeing now is a natural correction rather than a crash triggered by tariffs.
Are tariffs really just distracting from greater risks?
Not everyone agrees with Bessent’s analysis. Many investors and analysts believe that the sudden surge in import tariffs plays a direct role in the market decline spiral. Jacob Falkencrone, a global strategist at Sachs Bank, began calling April 2 “a “a day of liberation for the U.S. economy” from Trump’s perspective, but a nightmare for the rest of the world. FalkenClone said it was the most aggressive U.S. tariff in more than a century, and the market responded completely to your expectations: a broad-based sell-off of everything from technology to retail to industrial companies. So while DeepSeek may have caused early technological annoyance, tariffs are the ultimate edge.
Why is the Ministry of Finance so focused on the bond market?
There is another layer here. When the stock was hammered, Bessent’s eyes fell completely on other bond markets. From his point of view, the real crisis is not in the stocks. This is the growing debt load and rising borrowing costs in the United States.
Bessent inherited a Treasury Department and stared at a tsunami of financing for a Meirong. Thanks to Biden’s short-term borrowing strategy for the year, the United States now has to pay a lot of debt (higher interest rates).
To avoid disaster, Bessent hopes to turn his attention to 10-year fiscal yield, a key benchmark that affects everything from mortgage rates to national interest payments.
Can pushing down yields really stop the debt crisis?
Bessent’s strategy is to design reduce long-term borrowing costs by reducing yields. Strangely, Trump’s tariffs may help. Why? Because they scared investors to buy safe haven U.S. bonds, the drive yields were lower.
In just three months, the 10-year fiscal yield fell from 4.80% to 4.08%. That’s huge. This means that the U.S. can afford more debt. This could be the difference between managing state debt or spiralization and what some say is the sovereign debt doom cycle.
Big names like Ray Dalio and Stanley Druckenmiller have warned that the U.S. will only stop debt in a few years. If this happens, the interest cost will explode and the country may face a mature fiscal crisis.
Is the stock market sacrificed to save the economy?
That’s a trillion dollar issue. If Bessent’s plan works, a drop in yield could take the U.S. time to resolve its debt problems. But in the short term, the market may continue to suffer losses.
Currently, the pain on Wall Street seems to be trade off The government is willing to accept it. Bessent is not trying to support stock prices – he tries to avoid a credit crash. Whether this gambling has money will take time to watch it.
One thing is clear: It’s not just about Trump, tariffs or tech hype. It’s about a fragile financial system trying to unite itself while facing inflation, rising debt, and the unknown consequences of the AI revolution.
So, who should really blame Trump or technology?
It’s not black and white. Trump’s tariffs undoubtedly shocked global trade confidence, but DeepSeek ai bubble The unsustainable MAG-7 valuation has laid the foundation for the pullback. Coupled with the debt burden of fear of recession and thriving, you’ll have a perfect storm.
Bessent’s “Mag-7, not Maga” system may sound like a political spin, but it reflects a deeper reality. The swing market is not only based on policy. They are systematic. And they are not over yet.
FAQ:
Why does Scott Bessent blame DeepSeek AI for market crashes rather than Trump’s tariffs?
Because he believes that the bursting of the MAG-7 technology bubble is the real trigger, not the tariffs.
What is Scott Bessent’s plan to stop the U.S. debt crisis?
He wants to lower fiscal yields for 10 years to reduce borrowing costs.
