The Trump administration is shifting Wall Street from "ally" to "adversary," as the president once viewed by the financial world as a supporter is now rolling out a series of policies that have caught investors off guard, driven by midterm elections and voter concerns over the cost of living. According to reports from Wednesday, over the past week, Trump has successively introduced multiple restrictive measures targeting the financial industry, including blocking large investors from purchasing residential properties, calling for a cap on credit card interest rates, and announcing restrictions on executive compensation and stock buybacks. These actions signal a clear shift in the White House's policy focus, moving from last year's pro-market policies like tax cuts, spending reductions, and tariff relaxations to prioritizing the interests of ordinary consumers. Most startling was the Justice Department's criminal investigation into Federal Reserve Chair Jerome Powell, which Powell described as an intimidation tactic to force interest rate cuts. This action prompted banking executives, including JPMorgan Chase CEO Jamie Dimon, to publicly defend the Fed, highlighting the heightened tension between the administration and the financial sector. Treasury Secretary Bessent's statement to bankers last April is now being realized: "Over the past forty years, Wall Street has become richer than ever... For the next four years, it's Main Street's turn." A White House spokesperson stated in a declaration that repeated record stock market highs and rising real wages demonstrate Trump's ability to "unleash historic prosperity" for both consumers and investors. Financial stocks are under pressure, and the market has entered a wait-and-see mode. Trump's call last Friday evening to temporarily cap credit card interest rates at 10% caused shares of major card issuers and network service providers to fall on Monday and Tuesday. Stock prices for Citigroup, American Express, Capital One, Mastercard, and Visa all declined between 4% and just over 7% over those two days. The plan to prevent large investors from buying single-family homes also hit the stock prices of two major single-family landlords and Blackstone Group, which owns a smaller competitor. However, these stocks have since recovered some of their losses. Nevertheless, the broader stock indices have not reflected excessive concern. Investors have grown accustomed to Trump's vacillation on many ideas, and some proposals would require Congressional support. House Speaker Mike Johnson hinted on Tuesday that Trump's credit card interest rate proposal faces a tough path in Congress. Peter Boockvar, Chief Investment Officer at One Point BFG Wealth Partners, said, "The credit card proposal probably doesn't happen — same with restricting institutional home buying. So the market is in a wait-and-see mode." Dan Ivascyn, Chief Investment Officer at bond giant Pimco, advised to "expect surprises and adjust portfolios accordingly." Pimco has adjusted its portfolio, including purchasing more bonds from non-US issuers. Brad Golding, a portfolio manager at New York hedge fund Christofferson Robb & Co., stated, "Investors thought policy uncertainty would magically disappear after the April 2025 tariff event. Now we see that the midterm elections are more important than bank profitability and market stability." The US midterm elections are scheduled for this November. The consequences of the policies are unpredictable, and the impact is spreading across industries. The investigation into Powell immediately drew criticism from former Fed and Treasury officials, as well as lawmakers, including North Carolina Republican Senator Thom Tillis, a member of the Senate Banking Committee. This could hinder Trump's ability to get a potential Powell successor confirmed. JPMorgan's Dimon and Bank of New York Mellon CEO Robin Vince both defended the Fed during Tuesday's conference calls discussing bank quarterly earnings. Dimon said political interference with the Fed would lead to higher inflation and interest rates, rather than achieving Trump's stated goal of lowering rates. This investigation might even encourage Powell to remain on the Fed's Board of Governors after his term as Chair ends later this year. Other proposals could also have unintended consequences, which may explain the market's muted reaction. Industry groups warn that cutting credit card rates could restrict credit access for middle- and low-income consumers. Boockvar pointed out, "Blocking institutional investors from buying homes to rent sounds good but could negatively affect families who want to live in a house but can't afford to buy one. Furthermore, it might discourage homebuilders from adding new supply to the market." Trump's affordability push could impact industries beyond finance. The administration has hinted at a desire to lower gasoline prices for American consumers by adding Venezuelan oil to the market. Lower oil prices would help drivers but could affect energy company profits. The administration has indicated that more affordability proposals could be announced when Trump attends the World Economic Forum next week. Despite the unsettling news, Wall Street analysts are still searching for reasons for optimism. Morgan Stanley told clients on Monday that the Trump administration's efforts to prioritize housing affordability would benefit some consumer-related stocks. If the government provides incentives to homebuilders to encourage them to increase housing supply, it could boost those companies' earnings.