Three Catalysts That Could Trigger a Stock Market Crash Under Trump

Tariffs may not be the biggest threat to the Trump-led bull market rally

Mar. 14, 2026 at 8:06am

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While the stock market has soared under President Donald Trump's first, non-consecutive term, three potential catalysts could trigger a market crash that has nothing to do with his tariff policies. These include the risk of an oil price shock from the ongoing Iran war, the Federal Reserve's growing division and potential leadership change, and historically high stock market valuations as measured by the Shiller P/E ratio.

Why it matters

A stock market crash under Trump's presidency could have significant economic and political ramifications, undermining the narrative of his administration's economic success. Understanding the key risks beyond just tariffs is crucial for investors to navigate the current market environment.

The details

The Iran war has disrupted oil exports through the Strait of Hormuz, causing a 36% spike in crude oil prices in the first week. Oil price shocks have historically led to higher inflation, lower consumer spending, and weaker labor markets, which could prompt the Federal Reserve to pause its rate-easing cycle. The Fed is also facing growing internal divisions, with dissents recorded in the last five policy meetings, a rarity for the central bank. Additionally, the stock market's Shiller P/E ratio, a measure of long-term valuations, is at the second-highest level in 155 years, suggesting a potential market correction is looming.

  • On February 28, 2026, U.S. and Israeli armed forces began attacks against Iran.
  • In the week after the Iran attacks began, the spot price of West Texas Intermediate (WTI) crude oil skyrocketed 36%.
  • Over the last five months, the S&P 500's Shiller P/E Ratio has been vacillating between 39 and 41, marking the second-priciest stock market on record since 1871.

The players

Donald Trump

The 45th and 47th President of the United States, whose first, non-consecutive term ended in January 2021 and whose second term began in January 2025.

Jerome Powell

The current Chair of the Federal Reserve, whose term is set to end in two months.

Kevin Warsh

The nominated replacement for Jerome Powell as the next Chair of the Federal Reserve.

Ryan Detrick

The Chief Market Strategist at Carson Group, who compiled data on major geopolitical events and their impact on the stock market.

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What they’re saying

“There have been over 40 major geopolitical events, including wars, assassination attempts, invasions, terrorist attacks, and financial crises, since the early stages of World War II. Many of these events did not lead to a stock market crash, with the S&P 500 higher 12 months later 65% of the time.”

— Ryan Detrick, Chief Market Strategist, Carson Group

What’s next

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The takeaway

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