Donald Trump’s recent Cabinet appointments are sparking significant reactions both politically and economically, with Wall Street seeing notable consequences.
The most controversial of his picks is Robert F. Kennedy Jr., a vocal critic of vaccines, who Trump has chosen to head the Department of Health and Human Services. This decision has sent shockwaves through the stock market, particularly within the pharmaceutical sector.
Stocks for major pharmaceutical companies like Moderna, Pfizer, and Novavax experienced steep declines following the announcement. Novavax and BioNTech saw drops of more than 7 percent, with the bulk of the losses occurring after news of Kennedy’s appointment broke.
Moderna’s stock plunged to $39.77, marking its lowest point of the year. Pfizer fared slightly better, with a smaller loss of 2.6 percent, closing at $26.02.
The pharmaceutical industry had previously hedged its bets in the 2024 election cycle, making significant contributions to both major political parties. However, the industry ultimately donated more to Republican candidates, with approximately $8.3 million in total, according to data from OpenSecrets.
But Trump’s impact on the market is not limited to the pharmaceutical industry. As the initial optimism surrounding his pro-business agenda begins to wane, investors are growing concerned about the potential costs of his policies. The S&P 500 has seen declines, with technology stocks leading the downturn.
Experts warn that Trump’s proposals could lead to larger budget deficits and inflationary pressures. Charles-Henry Monchau, chief investment officer at Banque Syz & Co, noted that there would be a “price to pay” for these policies.
One of Trump’s more contentious proposals involves the imposition of tariffs on imported goods, with rates ranging from 200 to 2,000 percent. Economists predict that such a drastic measure would lead to significant inflation, with American consumers bearing the brunt of the costs. Companies that rely on foreign suppliers are already preparing for price hikes, especially in industries like automotive and retail.
In addition, Trump has suggested a more moderate tariff plan that would include a 20 percent worldwide tariff and a 60 percent tariff on Chinese goods.
While less extreme, this plan could still have severe economic consequences. A study by the nonpartisan Tax Policy Center found that it could reduce household incomes by an average of $3,000 in 2025.
As Trump continues to roll out his policy proposals, the economic impact is becoming clearer, and Wall Street is reacting with caution.
