The stock market has only 2 catalysts

• It's tough for investors to play the machine without getting knocked about.

How it works: Before the war, fears over how AI would reshape a range of industries were driving stocks down — and that concern hasn't gone away.

• Last week, cybersecurity stocks fell on a report that Anthropic's new model Mythos poses "unprecedented cybersecurity risks."
• Trump's social posts, meanwhile, have amplified the war-driven volatility in the markets — witness last Monday's oil futures market drama.

Zoom in: Investors now must have a strategy for dealing with Trump's posts and announcements. One boutique hedge fund, Anaconda Invest, recently told Bloomberg that it has decided to ignore them.

• Trump "changes opinion 10 times a day," Renaud Saleur, chief executive of the fund, told Bloomberg. The president's posts are a distraction and their implications for stocks and derivatives are "not manageable," he said.

Friction point: Most other investors are going all in to try and read the Trump tea leaves.

• "Indeed, one prominent investor noted to us that right now, it is impossible to trade in financial markets without getting into the mind of Trump," Jeffrey Sonnenfeld wrote recently in Fortune. It's more important than any macroeconomic indicator.
• " The Market' is just a guy staring at two screens. One has Truth Social. The other is Anthropic's blog," is how one poster on X recently summed up the situation.

The big picture: The Trump-driven market really kicked into gear a year ago this week — with his "Liberation Day" posterboard, and resulting market selloff.

• Trump reversed that decline by pulling back on tariffs — and the term TACO was born.

What to watch: The question now for investors is whether there is a TACO way out of the current decline. As any overeater knows, the third taco never tastes as good as the first.

Yes, but: Trump's posts can briefly change the direction of the market, but can't quite allay the larger forces brought on by the war.

• Surging oil prices, inflation fears and overall geopolitical uncertainty stemming from the war that began more than a month ago are weighing on stocks, Goldman Sachs researchers wrote in a note Friday evening.

By the numbers: The S&P 500 is now down nearly 9% from its January high, flirting with what's known as a correction (a fall of 10% or more).

• The valuation of these stocks — how expensive they look relative to company earnings, or the price-to-earnings ratio — has already dropped more than 10%, Goldman's analysts note.
• The Dow and Russell 2000 are already in correction territory, as is the tech-heavy Nasdaq, which is sagging on AI and other tech industry pain.

Between the lines: Depending on your perspective the war has pushed stocks lower and investors can now pick them up on sale — or more pain is ahead.

The bottom line: Either way, the one thing investors can't do is ignore the big picture. Right now, that means hanging on the president's every post or ignoring him.