Following the 2024 presidential election, stock indexes and the U.S. economy overall saw increased returns as investors expressed confidence in the touted conservative, free-market policies.
One of President Donald Trump’s promises leading up to the 2024 election was the threat of tariffs on various countries with which the U.S. conducts trade. The idea Trump would enact the tariffs was not directly positive for investors; rather, his threats were a negotiating tactic.
“Teddy Roosevelt said, ‘Speak softly and carry a big stick.’ Trump doesn’t speak softly but carries a big stick,” University of Iowa political science Associate Professor Tim Hagle said.
Hagle characterized Trump’s reputation as a businessman and the “art of the deal” as a significant reason for his election, citing the economy as a constant factor in politics.
Then, the Trump administration levied the tariffs, defied expectations, and, according to the Wall Street Journal, caused the market to lose $3 trillion in market capitalization.
The UI offers students various opportunities, like clubs and advanced academic programming, to step out and experience the real world. Now, their expectations and experiences are changing.
HawkTrade Investment Club is one such club. The organization is part of several student groups offered to all UI students through the Tippie College of Business.
HawkTrade meets weekly for current event updates and lessons on financial portfolio management, offering students resources and experience with real-world applications of what they study in Tippie’s halls.
Specifically, members are asked to participate in stock pitches and discuss stock opinions, which are individual evaluations of a company’s share price performance combined with overall performance.
Their understanding of this information is then realized through faux portfolios traded using an application called MarketWatch and its Virtual Stock Exchange, which provides stock information and simulates market behavior, allowing students to trade using fictitious money, according to HawkTrade co-president and UI second-year student Jack Kuehl.
“Every meeting, we sort of go over how our fictional portfolios have moved,” Kuehl said. “So, that’s been very interesting to follow with all this commotion going on in the economy.”
He said the fictional portfolios are monitored and ranked on a leaderboard in a competition watched throughout the year.
Kuehl added, however, that MarketWatch is not entirely accurate in that it allows them to trade in unrealistic ways. For example, he noted that HawkTrade members who are currently succeeding are constantly shorting the market, a position he said real stock brokers on Wall Street would not typically allow.
Comparatively, he said he has been more realistically longing the market, holding an asset long-term in the hopes its price will increase. When examining the current economic turmoil, he noted his portfolio is more suitable for traders whose portfolios are rapidly losing value.
“So, I’ve personally been still holding long positions, hoping things will go up, but my fictional portfolio has definitely taken a hit from that,” Kuehl said.
HawkTrade’s weekly financial headline updates, he added, have been much more “comprehensive” due to the sheer volume of information coming out of the market. Daily rallies and corrections perforated the market shortly before Trump announced a 90-day pause on all tariffs, besides those on China.
Kuehl said the shock to investors came from the dissonance between their initial confidence in Trump’s policies and the severity of the tariffs his administration pursued. The confidence came from potentially looser standards of regulatory compliance, especially by the SEC, considering its reputation for stricture in the area of mergers and acquisitions during the previous administration.
Lower corporate taxes, he said, were another factor that encouraged investors and entrepreneurs. Though, as time passed, Kuehl said they realized a different set of circumstances.
“You get to April, you get to March, all of this tariff talk, I don’t think anyone truly anticipated how severe it would actually be,” he said.
However, amid the market turmoil, Kuehl said the only thing traders and investors can do is wait.
“Where we’re at right now, like U.S. retail investors, all we can really do is sit along for the ride. [We] can’t, unfortunately, control what’s going on with the economy,” he said. “It’s just sort of a fundamental economic disruption.”
Kuehl said, however, the market conditions being witnessed are not all bad. For HawkTrade, these distinct developments in finance provide members with more learning opportunities than anything else.
“Even though it’s not necessarily for the right reasons, this is kind of the Super Bowl for Hawk trade,” he said. “Being able to put a lot of the things that we’ve been instilling into our heads into practice, looking at the market, checking MarketWatch competitions, market updates, and just seeing a lot of the dynamics of the markets.”
Expectations and future predictions are fundamental elements in finance, but for some students, the damage to their expectations is being realized in more than just the market.
While HawkTrade is open to all students, another Tippie organization is more selective — and prestigiously regarded — but members are not entirely sure of what to expect for themselves.
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The Hawkinson Institute is the UI’s undergraduate investment banking program. According to their site, only 20 undergraduate students are accepted into the program on average during the academic year.
The institute provides members with experience through meetings with industry professionals, select courses, and networking opportunities intended to land them internships, job offers, and careers after graduation.
Mitchell Joines, a fourth-year student with Hawkinson, has one thing on his mind in all the chaos: job security.
“Anytime you have the DOW dropping 4,000 points in a few days, you know, it’s going to make me a little bit nervous,” he said. “Little bit nervous, possibly for my own job, starting full time, and job security and things like that.”
Joines landed an internship during his second year for the summer prior to his third year, as he said is the goal of the Hawkinson program. Now, he is looking at a full-time return to that company. Through mentorship and networking opportunities, Hawkinson members are given the chance to get up to their knee in the door in the investment banking world.
However, the longevity of certainty is not always a positive, especially in the current world. The issues at hand when he started interning at the company where he would soon work were inflation and interest rates, he said, but now companies have different priorities, making it difficult for students to market themselves successfully after graduation.
“It kind of makes it hard for these banks to judge with head count is definitely something that we’re kind of mentioning, like full-time return offers to actually get the job after the end of the internship,” Joines said. “It’s something we kind of talk about and kids are definitely a little bit worried about.”
As a student looking forward to a career in investment banking, Joines said the industry’s primary difficulty lies in merger and acquisition deals. With falling asset prices, these deals are struggling to retain a base requirement for the deals; the merging or acquiring firms themselves.
“Buyers are pulling out of these transactions. So, as an investment bank, when I’m representing a client’s business trying to sell it, and half the people that are interested in buying it just drop out, it makes it really difficult,” he said.
Joines and Kuehl are two students who are looking to network, gain experience, and prepare themselves for a career. Like Kuehl, Joines said the one thing they can do at the moment is wait for prices to return to a serviceable level so the skills and education they have acquired at the UI can truly benefit them in the world.
“So, it’s definitely affecting banks that purely do M&A, same place I’m working, so it makes me a little nervous to go work there and how they’re reacting,” Joines said. “Their stock price is being reflected with the tariffs. But we’re absolutely going to have to wait and see.”