In a week that felt like a speed-run of an entire presidency, Donald Trump’s administration unleashed what it proudly called the “single largest deregulatory action in American history,” while simultaneously threatening political extinction for members of his own party over trade policy. The market, in its infinite and often inscrutable wisdom, reacted with a mix of sector-specific glee, broad-based tech anxiety, and a general sense of whiplash that is quickly becoming the new normal for investors. The main indices, including the DOW, S&P 500, and NASDAQ, all saw declines on Thursday, February 12th, driven more by fears of an AI-fueled tech rout than by the tectonic shifts in environmental and trade policy emanating from Washington.
The Great Un-Regulating Act of 2026
The centerpiece of the week’s chaos was the formal repeal of the EPA’s 2009 “endangerment finding.” This isn’t just some bureaucratic fine print; it was the legal bedrock that allowed the federal government to regulate greenhouse gases as pollutants under the Clean Air Act. With the stroke of a pen, the administration claims to have vaporized the basis for everything from vehicle emission standards to power plant regulations, promising a savings of over $1.3 trillion for taxpayers and an average of $2,400 per new vehicle. EPA Administrator Lee Zeldin, standing beside the president, declared the finding—once called the “Holy Grail” of the “climate change religion”—to be “eliminated.”
The market’s reaction was predictably bifurcated. Fossil fuel producers, smelling deregulation in the air, saw a surge of interest. Energy stocks had already been climbing in anticipation of the move. While specific data for February 12-13 is still settling, past interventions by Trump in the energy sector, such as in Venezuela, have sent shares of oil giants like CVX (+6.3%) and XOM soaring. The promise of a friendlier regulatory landscape for oil consumption in the massive U.S. transportation sector is a powerful motivator for investors in the fossil fuel industry.
On the other side of the ledger, the electric vehicle sector felt a chill. The very premise of a government-mandated shift to EVs has been shaken. Shares of RIVN took a noticeable hit, dropping over 5% on February 12th. This continues a trend where traditional automakers like GM and F have seen their stocks climb on the prospect of a friendlier outlook for their profitable internal-combustion engine vehicles. The move creates a bizarre paradox for these legacy automakers, who have already sunk billions into EV development based on the prior regulatory framework. Just last week, STLA (Stellantis) announced a staggering €22 billion charge after admitting it “overestimated” the pace of the EV transition, causing its stock to plummet 24%. Now, the very government policy that spurred that investment has been dynamited, leaving carmakers to navigate a chaotic and uncertain future. Some industry groups, in a moment of stunning foresight, had even urged the EPA not to scrap the endangerment finding entirely, warning it could unleash “regulatory chaos.”
Tariff Man Returns, Threatens His Own Party
As if rewriting decades of environmental law wasn’t enough, the administration also spent the week doubling down on its favorite economic tool: the tariff. The ongoing trade tensions with Canada, a critical U.S. partner, reached a fever pitch. Trump took to Truth Social to issue a stark warning to any Republican who dared to vote against his tariffs on Canadian goods: “Any Republican, in the House or the Senate, that votes against TARIFFS will seriously suffer the consequences come Election time, and that includes Primaries!” This came as the House voted to rebuke the president’s tariffs on Canada, setting up a classic intra-party showdown.
The market is left to digest the increasingly obvious contradiction at the heart of the tariff strategy. While the president boasts of a soaring Dow and claims tariffs are bringing in billions, independent analyses tell a different story. The nonpartisan Tax Foundation estimates that the tariffs have already resulted in an average tax increase of $1,000 per U.S. household and could reduce long-run GDP. The Bank of Canada has identified the upcoming review of the USMCA trade pact as an “important risk to the outlook,” causing Canadian businesses to hold back on investment due to the uncertainty. Stocks in sectors sensitive to trade, like steel producers and manufacturers such as AXL (American Axle & Manufacturing), face continued volatility as threats of 25%, 50%, or even 100% tariffs on trading partners become a regular feature of the news cycle.
A Market Numb to the Noise?
Despite these monumental policy shifts, the broader market on Thursday, February 12th, seemed more preoccupied with a tech sell-off. The NASDAQ plunged 2%, the S&P 500 fell 1.6%, and the DJIA dropped 1.3%, with heavyweight tech stocks leading the decline. AAPL (-5%) and CSCO (-12.3%) were among the biggest losers as investor anxiety over AI disruption and lackluster guidance overshadowed the drama in Washington.
This dynamic paints a picture of a market that has, perhaps, become desensitized to the constant political chaos. The Trump administration’s policy announcements—whether delivered via press conference or a late-night social media post—create sharp, often contradictory, movements within specific sectors. Oil stocks rally while EV makers fall. Domestic steel producers might cheer while automakers who rely on imported parts lament. Yet, the broader market seems to be driven by more fundamental, if currently fearful, concerns about technology cycles and corporate earnings.
The repeal of the endangerment finding is a generational policy shift that will be challenged in courts for years, creating a long-term fog of uncertainty for the energy and automotive industries. The constant threat of a trade war with America’s closest allies injects a level of unpredictability that makes long-term capital planning a gambler’s game. And yet, the market churns on. For now, investors seem content to ride the sector-specific waves created by the political tides, even as the long-term economic shoreline is being dramatically and unpredictably reshaped before their very eyes.
DISCLAIMER: We read Trump’s posts so you don’t have to. This is comedy meets market data, not financial advice. Not political advice either – we just like charts and chaos.
Elana Harper is a seasoned financial editor and market analyst with over a decade of experience covering global equities, economic trends, and corporate earnings. Known for her sharp insights, Elana specializes in making complex financial topics accessible to a broad audience. She now serves as the Senior Financial Editor at Stock Market Watch, where she oversees daily market coverage and political commentary.