Many Wall Street bankers and business executives were excited about the potential of a pro-growth administration following Donald Trump’s victory in the presidential election.

But it appears that, weeks into his presidency, much of that enthusiasm is fading.

However, recent reversals on tariffs, coupled with concerns about increasing inflation, have left some business leaders feeling unsettled and uncertain about the future.

The deals market just ended its quietest January in a decade, The Wall Street Journal reported. 

And executives have begun to use words such as ‘fragility’, ‘volatility’ and ‘wait and see’ to describe their outlooks for businesses. 

‘Nobody knows what’s up,’ Nick Pinchuk, chief executive of toolmaker Snap-on, said on a conference call last week.

‘It’s like being on Space Mountain at Disney World.  

‘It’s like being on Space Mountain, sitting in a car that moves left and right with sudden turns in the dark. You’re not sure where you’re headed, but you have faith that you’ll end up in the right place eventually.’

Business leaders are rattled by Trump’s U-turns on tariffs last week

Billionaire executives, such as hedge fund manager Bill Ackman, endorsed Trump in his presidential campaign.

And any business leaders and Wall Street investors celebrated Trump’s victory in the presidential election, due to optimism around his promise of a pro-growth and pro-business administration. 

The president-elect at the time received a hero’s welcome at the New York Stock Exchange when he visited in December.  

The S&P 500, which tracks the 500 biggest companies in the US, hit record highs last month, as the so-called ‘Trump rally’ gathered pace.

But Trump’s U-turn on tariffs last week has dented some business leaders’ confidence. 

He announced that he was implementing 25 percent tariffs on imports from Mexico and Canada, only to delay both for a month a few days later. 

A number of executives, as well as top investment bankers and other industry advisers, told The Wall Street Journal that their priorities have shifted in recent days to dealing with tariffs and policy issues. 

They said they needed to work out their supply routes if the promised tariffs do come into effect, as well as figuring out if they need to raise their prices. 

This, in turn, does not leave much space for thinking about deals.

Less than 900 deals were announced in the US in January, according to data from LSEG. That is compared to 1,200 deals last January, and over 1,500 in 2023.

The president-elect at the time received a hero’s welcome at the New York Stock Exchange when he visited in December

Many business executives were thrilled at the prospect of a pro-growth administration when Donald Trump won the presidential election last year, but the enthusiasm is fading for some

Mexican President Claudia Sheinbaum successfully negotiated a deal for a one-month reprieve from tariffs last week

David Galullo, CEO of the San Francisco design firm Rapt Studio, said he tried to remain positive about the new President’s early days, despite not having voted for him.

But he said he has been left concerned by Trump’s first weeks in power. 

He is planning to address his team, but he is at a loss for words because so much is happening so quickly.

‘I don’t know what to say,’ he told The Wall Street Journal. 

However there are also some CEOs who are eager to do deals, even if their counterparts may not be. 

There were six hostile or unsolicited deals announced in January, a level not seen in a month since May 2018, LSEG data revealed.

Some executives remain optimistic about the year as a whole, and predict there could be more deals than in recent years.  

‘The much anticipated M&A tsunami of 2025 has yet to make landfall, but the conditions are all still ripe for that to arrive later this year,’ Jim Langston, an M&A partner at the law firm Paul, Weiss, Rifkind, Wharton & Garrison, told The Wall Street Journal. 

He added that while the past month has been unpredictable, historically M&A activity does not increase after a presidential inauguration until the start of the second quarter.