When Donald Trump became president for the second time, many observers assumed he would use the stock market as a barometer of how well or how badly his policies were affecting US confidence as he did during his first term.

However, this notion of markets forming a ‘guard rail’ has been well and truly dispelled by the destruction of trillions of dollars of household wealth as stocks and other assets have lurched lower, culminating this month in one of the worst three-day falls in history as the ‘Liberation Day’ tariffs were announced.

Between the close on Tuesday 2 April and the close on Monday 7 April, the MSCI World index lost 11.6% of its value while the S&P 500 dropped 10.7% and the Nasdaq 100 dropped 11.1% leaving all three indices in negative territory on a one-year basis.

Having witnessed Black Monday and a number of other collapses first-hand (Japan in 1989, Russia in 1994, Asia in 1997, 9/11 in 2001 to name a few), there is one key difference which investors need to take on board.

In the past, major sell-offs have usually elicited a coordinated global response with central banks lowering rates or buying assets to                         restore confidence.

In the world of Trump 2.0 that kind of coordination is more complicated, so it could take some time before a measure of normality is restored. 

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