Trump’s tumultuous start
When President Trump took office in January for his second term, business leaders anticipated an administration that would lower taxes, loosen regulations and open up deal-making.
Instead, Wall Street got chaos. The president has taken a cudgel to global trade with enormous tariffs, threatened the independence of the Fed and made the landscape for M.&A. more uncertain.
Under Trump, the S&P 500 has fallen about 8 percent, the worst performance for the first 100 days of a presidency since President Gerald Ford in 1974.
Back then, the Watergate scandal prompted political instability and the economy was facing a recession and an oil crisis. The markets this year have been socked by the president’s protectionist trade policy.
Here are the themes that have defined Trump’s first 100 days in office. Trump will commemorate the occasion with a rally in Michigan this evening, and the White House is expected to announce relief on auto tariffs.
On that note: General Motors on Tuesday pulled its full-year forecast as it reported first-quarter results. “The prior guidance cannot be relied upon” amid tariffs uncertainty, said Paul Jacobson, the company’s C.F.O.
Markets and the economy
Investors now talk about the “sell America” trade. Trump’s handling of the economy, a longstanding strength, is weighing on his popularity, the latest Times/Siena College poll shows. Another potential hit: Amazon will reportedly begin spelling out the tariff cost in the final price of an item, according to Punchbowl News.
The next few weeks could be decisive. The toll of tariffs hasn’t yet shown up meaningfully in inflation, G.D.P. and jobs reports. That could change with new data due this week, putting the Fed in a prolonged limbo on interest rates.
All eyes will be on trade deals. Treasury Secretary Scott Bessent said on Monday that an accord with India could be struck first, offering clues on what the administration can achieve. Still, an agreement with China, the biggest to come, looks far away.
The question: Will tariffs turmoil derail other areas of the Trump agenda, including tax cuts?
Government cuts
When DealBook summed up Trump’s first week, we called out the “Elon Musk factor,” the likelihood that Trump and the world’s richest man might soon find the global stage too small to share. The first fissure came soon after Trump was sworn in: Musk dismissed a $100 billion A.I. initiative that was the president’s first major tech deal.
Last week, Musk announced that he would spend less time in Washington starting in May, saying the main work of setting up his cost-cutting effort was largely done. That said, his initiative’s goal is to save about $150 billion, down from as much as $2 trillion.
Here’s some of what Musk has done in his own 100-days-or-so tenure:
All told, Musk’s group has eliminated more than 200,000 federal positions as of March, according to an estimate from the outplacement firm Challenger, Gray & Christmas. According to one analysis, Musk’s cuts will end up costing taxpayers $135 billion from lost productivity, re-hirings and paid leave for thousands.
A big reset happened in March. In an explosive cabinet meeting, Musk blew up at Secretary of State Marco Rubio, accusing him of not doing enough to cut costs. You have fired “nobody,” Musk said.
Trump eventually defended Rubio, and set ground rules: Cabinet chiefs would run their departments, and Musk would be an adviser. It was the first clear sign that the president was willing to put limits on the billionaire’s power.
What to look for next: Musk may be set to spend less time on his government work, but expect more cuts. The administration is hunting for savings to offset the anticipated hit of extending the corporate tax cuts, which Congress is working on this week.
Reductions to the federal work force could show up in Friday’s jobs report. Economists expect about 150,000 jobs to have been added in April, down sharply from 228,000 in March.
Assault on institutions
Trump has not only attacked universities and the legal profession — which alone would be unconventional — but has also taken aim at specific institutions, acts that were previously unthinkable.
Trump has taken aim at a handful of elite schools. A major reason he has cited is what he called a failure to fight antisemitism. Many, like Columbia University, have bowed to demands in hopes of recouping canceled grants and contracts.
Harvard last week became the first to sue the administration over the crackdown. The university received a list of more onerous demands, and its resistance may have helped spur a coalition of 400 university leaders to fight back. In response, the Trump administration froze $2.2 billion in grant funding and is weighing a revocation of Harvard’s tax-exempt status.
(Hundreds of lawyers have been leaving the Justice Department’s civil rights division in recent days after being told to focus on cases against the Ivy League.)
Trump has also attacked Big Law. He has issued executive orders to revoke security clearances for several law firms, which are needed to do much of their work.
Firms have split into two camps. Some, like Paul Weiss, negotiated deals with Trump that include hundreds of millions of dollars worth of pro bono work. Others, like Jenner & Block, have sued to block the orders.
Both campaigns include efforts to stop D.E.I. programs. Trump’s demands on Harvard, for example, included “all preferences based on race, color, national origin.” Paul Weiss’s settlement required the firm to reiterate its commitment to “merits-based hiring, promotion and retention” and hire an outside expert to audit its recruitment practices.
What to look for next: Now the ball is in the courts. Harvard’s lawsuit argues that the administration is seeking unconstitutional control over the university, and that it ignored due process. It has so far not sought a preliminary injunction, a signal that it believes the court may be able to act quickly.
And last week, two federal judges seemed receptive to arguments from two big law firms, Perkins Coie and WilmerHale, that the orders against them should be permanently blocked because they blatantly violated the Constitution.
The outcome of these cases could help determine whether Trump’s attacks generate lasting changes to how bedrock American institutions operate — or just headlines.
HERE’S WHAT’S HAPPENING
Canada’s Liberal Party wins the election, bolstered by anti-Trump sentiment. Prime Minister Mark Carney’s party secured a narrow victory. But it was unclear if the former central banker will have to govern with a splintered majority as Ottawa vows to fight back against President Trump’s tariff threats.
Power in Spain and Portugal has been mostly restored. Engineers worked through the night after tens of millions of people in the region were plunged into darkness on Monday, disrupting airports, rail travel and internet access. The cause is still unknown, though Spain’s electricity operator, Red Eléctrica, said there are no signs of cyberattacks or foul play.
Banks reportedly sell off the last chunk of Twitter deal debt. In offloading roughly $1.2 billion in Twitter loans on Monday, Morgan Stanley, Bank of America and other lenders have now found buyers for all of the debt they lent to Elon Musk in 2022 to buy the social network, according to The Wall Street Journal. That was looking in doubt as recently as last year, but demand perked up as Twitter’s financial prospects improved post-Election Day.
Thrive’s bet on building, buying and holding
Thrive Capital made a name and a reputation by investing in on-the-make start-up giants like Instagram, Stripe and more recently OpenAI.
Now the venture capital firm is raising a huge sum for a different sort of strategy: creating and investing in start-ups in slightly less glamorous industries, improving them with A.I., and using them as vehicles for buying up related companies, Michael de la Merced is first to report.
Meet Thrive Holdings, a vehicle for which Thrive is raising about $1 billion in initial funding, people with knowledge of the matter told DealBook. But because Thrive Holdings is essentially a kind of permanent capital vehicle, it can keep raising money, unlike a standard venture capital fund.
It’s a twist on an emerging trend in venture capital: investing in A.I. companies in more everyday sectors than, say, large-language models and using them to buy other businesses. (Wall Street has a term for serial acquisitions: roll-ups.) The idea is to use A.I. to make these companies far more efficient and get more customers — having a big operational role is a key part of the strategy — then expand them through M.&A.
Thrive itself has already backed a few companies that fit this mold, including Crete, an accounting firm, and Long Lake, which has bought up managers of homeowner associations. Thrive Holdings has started investing in similar industries, including the outsourced I.T. space, these people said.
But Thrive Holdings can stay invested in these companies for far longer than the decade or so that is the typical life span of venture funds. One person with knowledge of its strategy said that the intended holding time is “forever.”
Will it work? Thrive is betting that its history of incubating companies — it has done so for about a dozen start-ups, including five that became so-called unicorns with valuations of at least $1 billion — will give Thrive Holdings an edge. (It also plans to have an operating team stocked with technical talent and make use of Thrive’s connections to the likes of OpenAI.)
But it will face competition from others like General Catalyst (which also invested in Long Lake) and 8VC. And unlike traditional Wall Street roll-ups, whose histories include misses as well as hits, these firms are also focusing on earlier-stage companies, which are by definition riskier.
Grading Lutnick’s tenure as commerce secretary
Among the most prominent of President Trump’s cabinet members is Howard Lutnick, the Wall Street chief who serves as his commerce secretary. C.E.O.s and top deal makers have sought audiences with him, hoping to sway Trump’s thinking on business-related matters.
But while Lutnick has been ambitious — he has sought to become a leading moderate voice on trade policy as well as seeking control over the U.S. Postal Service and the customs service — responses to his efforts so far are mixed, The Times’s Ana Swanson reports:
Mr. Lutnick’s supporters say he brings fresh thinking that is badly needed in Washington. But executives and foreign officials have described some of his proposals as zany or harmful, and come away from conversations deeply unsettled, half a dozen people familiar with the exchanges say. …
Few of the ideas that Mr. Lutnick appears most enthusiastic about fall within the traditional purview of the Commerce Department, an agency with roughly 50,000 employees that oversees business, weather monitoring, fisheries, artificial intelligence and commercial space activity.
Within the department, employees say morale has plummeted, as the administration has piled on work and slashed hundreds of jobs. Technologists and scientists who have devoted their careers to making the United States more globally competitive — one of the Trump administration’s stated goals — say they have been left rudderless.
Perhaps most important, while Lutnick has appeared to win exceptions for some industries, Trump has let it be known that he’s not exactly onboard with the exemptions, Swanson writes.
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