Investing.com -- In an astonishing interview, U.S. Treasury Secretary Scott Bessent blamed the stock market plunge on China's DeepSeek versus President Trump's tariffs.
"For everyone who thinks these market declines are all based on the President's economic policies, I can tell you that this market decline started with the Chinese AI announcement of DeepSeek," Bessent commented in a Tucker Carslon interview.
Bessent is a former hedge fund manger, making the comments more remarkable.
"If I were the analyze in my old hat, and this is the only time I'm going to talk about it, ... what's happening with the market I'd say it's more a Mag 7 problem, not a MAGA problem," Bessent added.
While it is true that the release of DeepSeek created downside volatility in some Mag 7 stocks, especially NVIDIA (NASDAQ: NASDAQ:NVDA), shares had mostly stabilized before Trump kicked off his tariff regimen – first staring with Mexico and Canada and then this week’s reciprocal tariffs.
Since Trump announced the reciprocal tariffs on Wednesday, the S&P 500 has been down 10%, and the NASDAQ has been down 11%.
Below are Bessent's full comments on the market:
“Look, the market goes up and down. Warren Buffett has a saying, in the short run, the market's a voting machine. In the long run, it's a weighing machine. And in the long run, it's going to go up and down. In a way, do we have good policies? And in my former business, I commented on market structure, market ups and downs a lot. I'm trying not to do that. But for everyone who thinks that these market declines are all based on the President's economic policies, I can tell you that this market decline started with the Chinese AI announcement of DeepSeek. Right. So-called MAG7, the tech stocks, had been doing very well for about 18 months, led the market. And I think that there's kind of a real dose of reality in what was going on in AI. And I think US is going to remain the leader in AI. But the AI-related stocks started coming down. So like if I were to analyze in my old hat, and this is the only time I'm going to talk about it, my old hat. I'm not going to talk about what's happening with the market. I'd say it's more a MAG7 problem and not a MAGA problem. Right.”