Wall Street ended a wild August with the Dow up a little on Friday, cutting off a violent month for the global economy that spurred a wave of financial market volatility and posed a challenge for President Trump Donald John TrumpTrump to host Kuwait's White House leader in September-Virginia governor poll: Manchin leads his GOP justice with 10 points US official killed in battle in Afghanistan MORE .
The Dow Jones Industrial Average, the S&P 500 index and the Nasdaq closed on the last day of August were little changed from Friday's opening, with Dow and S&P up just 0.2 and 0.1
But the three indices were well below the level at the beginning of the month following a notorious rough stretch for Wall Street. The Dow fell 1.76 percent in August, down 474 points. This month, the index gained two of its seven biggest points losses, falling by 800 points on August 14 and 767 points on August 5.
S&P suffered a similar decline of 1.84 percent, while the tech-heavy Nasdaq lowered 2.6 percent for August ahead of new tariffs for Chinese-made consumer electronics and parts. Overall, the major US indices are still near the record highs they chopped earlier this summer, and stocks in general have skyrocketed since President Trump took office in 2017.
But the August whiplash for Wall Street seems to extend to the fall, a worrying prospect for Trump.
The president relies on a strong economy to beat voter states that are critical to his reelection campaign in 2020. Unemployment near historic lows, solid economic growth, rising wages and booming consumer spending provides Trump with plenty of data to bolster his case.
The recent turmoil is also threatening to undermine it, as Trump has often tied the success of his financial agenda to the daily ups and downs of the stock market. And the roller coaster August is at a critical juncture for the president with growing concern for his trade wars with China and Europe and concerns about an imminent recession.
Trump has tried to reassure anxious traders by talking progress toward a deal with China.
"Stocks were strengthened when China said it wanted to resolve the US trade problem with a" calm "stance," Ryan Sweet, director of real-time economics at Moody's Analytics, wrote in a research note from Thursday. “We have seen these fires cease to be short-lived. Therefore, this does not change our subjective chance of an agreement being made, which is still low. "
The president has also brushed off or even joked about some of Wall Street & # 39; s bloodiest August losses.
Asked by reporters at the Group of Seven (G-7) summit on financial market turmoil caused by his trade policy, Trump responded "Sorry, this is how I negotiate."
Last Friday, when Dow Jones closed a 2.4 percent loss on August 23 after China announced new tariffs, the president joked that stocks were falling because Rep. Seth Moulton Seth MoultonThe Hill & # 39; s Morning Report – Hurricane Launches Florida Changes Trump's Travel Plans Democrats Excluded from Debate in a Fight to Survive The Hill & # 39; s Morning Report – Gillibrand Falls Out debaters shrink MER (D-Mass.) suspended its presidential campaign in 2020.
While Trump has shrunk to contain mounting fears of a recession, the US economy has shown unmistakable signs of slowing the pace of the world's headwinds and the rising costs for his trade match. Withdrawals in the UK and Germany, fading growth in China and a number of geopolitical risks have also dampened the US economic outlook.
The surge of severe headlines and massive swings on Wall Street during August has led to the steepest fall in consumer confidence since 2012, according to the closely followed consumer sentiment study from the University of Michigan.
"Although overall sentiment levels are still consistent with modest consumption gains over the next year, the data nevertheless increased the likelihood that consumers could be pushed out of the customs cliff in the months ahead," said Richard Curtin, University of Michigan economist and director for the consumer sentiment survey.
"This can lead to much slower growth in consumption and the overall economy," he added.
Trump also takes a greater share of the blame for the obstacles facing the economy. In a Quinnipiac University poll of registered voters released Wednesday, 41 percent of those polled blamed the president's policies for damaging the economy, the highest level since Trump took office.
Consumption expenditures make up about 70 percent of the US gross domestic product, and households have driven the strong economy with many spending even in the midst of growing anxiety. This dynamic means that the decline in consumer confidence is a crucial warning of a major economic downturn.
"Consumers dipped in their savings to spend more in July," said Diane Swonk, chief economist at Grant Thornton, in a research note on Friday. "It is unclear how long they will continue to do so, given the decline in revenue and the prospect of more tariffs on the horizon."
As the sliding stock drives the anxiety higher, Trump continues to defy under mounting pressure from businesses, peasants, and his own party to end his trade war with China.
The president has dismissed fears of a recession and accused Democrats and the media of trying to sabotage the economy to derail his campaign. He has also intensified his pressure on the Federal Reserve to cut interest rates to almost zero levels in European countries with deeper threats.
”Trump tweeted Friday. “Poorly run and weak companies are smartly blaming these small tariffs instead of themselves for bad management … and who can really blame them for doing so? Apologies! "
Tomas Philipson, chairman of the White House Economic Advisers Council (CEA), said reporters who have written about the receding economy seemed to" want people to lose jobs "and" not be financially self-sufficient. "
" The way the media reports on the weather will not affect whether the sun shines tomorrow, "Philipson told the New York Times in an interview on Thursday. "But the way the media reports on our economy weighs on the mood of consumers, who live in consumer purchases and investments."
Although Trump and his top aides are dismissing the blame and belittling concern, the president has explored several ways to protect consumers from the harms of a receding economy.
Trump delayed the implementation of some new Chinese goods tariffs from September 1 to December 15, a move he said was intended to protect consumers from higher holiday purchase costs.
The President has also explored a potential tax cut equal to the cost of rising Chinese consumer goods tariffs, an idea flowed by Senator Rick Scott (R-Fla.) In a conversation with Trump's top economic adviser, Larry Kudlow  Lawrence (Larry) Alan KudlowMORE .
"There is nothing you can do but tariffs," Trump said Thursday. "And I do other things, too, by the way."
But the President has also insisted that his trade approach will reap benefits, an approach that has market observers worried about more volatility in the future.
things are tariffs, "Trump said Thursday on winning the trade match with China." It has a devastating effect, and they come to the table, and we'll see if they make a deal or not. "