Trump rings bell on record stock market – but will it last?
4 min read
Donald Trump’s Wall Street appearance celebrated record stock market gains, but analysts warn that his proposed economic policies may not sustain this growth in the long term. [Getty Images]
Donald Trump’s recent appearance on Wall Street, ringing the bell to open stock market trading, marked a celebratory moment for the business world. The crowd, which included some of the most influential figures in American business, was euphoric as the stock market had surged to new heights since Trump’s election. At the time, the president-elect was freshly named Time Person of the Year, and the mood on the trading floor reflected the optimism surrounding his economic plans.
Trump’s visit to Wall Street underscored his consistent emphasis on the stock market’s performance, which has been a key metric of his administration’s success. However, whether this moment will be remembered as the heralding of sustained economic growth or the peak of a market bubble is still uncertain. Trump is stepping into office at a time when the U.S. economy, according to Federal Reserve Chair Jerome Powell, is performing at a level that many other countries envy. With growth at 2.8%, a historically low unemployment rate of 4.2%, and a surge in productivity, the conditions are ripe for continued economic expansion.
The American stock market, buoyed by these factors, has reached record levels. The Dow Jones Industrial Average was on track to finish the year up over 17%. The S&P 500, which tracks the 500 largest U.S. companies, had gained 28% since the beginning of the year, while the tech-heavy Nasdaq had risen by more than 40%. Investors are hopeful that under Trump’s leadership, the market will continue to thrive, particularly with the expectation that his administration will loosen regulations and approve mergers and acquisitions that might have faced obstacles under a Democratic administration.
During Trump’s visit to the New York Stock Exchange, a range of business leaders, including Goldman Sachs CEO David Solomon and Target’s Brian Cornell, were present, all of whom greeted the president-elect with applause and chants of “USA! USA!” The event was a rare appearance of a sitting or former president at the exchange, emphasizing the importance of Trump’s relationship with the financial world. However, despite the euphoria, analysts caution that the market’s current highs might not be sustainable in the coming year.
While the U.S. economy shows strong growth, there are signs that the pace of job creation is slowing and inflation remains a concern. Moreover, some of Trump’s proposed policies—such as cutting government spending, erecting broad trade barriers, and his stance on immigration—could hinder long-term economic growth. The uncertainty surrounding these policies is causing some concern in the business community.
Mark Zandi, chief economist at Moody’s Analytics, expressed caution, saying that if Trump’s policies were implemented as he has outlined, they could present problems for the economy. “The totality of the policies, if enacted to the degree that the president has articulated, I think will be problematic for the economy,” Zandi stated. On Wall Street, however, Trump stuck to discussing policies that are more palatable to investors. He highlighted his plans to cut the corporate tax rate from 21% to 15% for U.S. manufacturers, reduce regulation, and speed up government approvals for projects.
These proposals have been well received by markets, especially during Trump’s first term, as such policies have been associated with boosting corporate profits. Stock prices surged under Trump’s leadership, particularly at the start of his presidency. However, the market also experienced significant downturns during trade wars with China and U.S. allies, and when the COVID-19 pandemic hit, the market plummeted before recovering rapidly.
Under Trump’s first term, the S&P 500 grew by more than 67%, a record performance that outpaced the gains seen under Presidents Bill Clinton and Barack Obama. Under President Joe Biden, the S&P 500 has risen by 59% so far. Whether Trump can replicate his first-term success is uncertain. On Thursday, the major U.S. stock indexes closed slightly lower, with the S&P 500, Dow Jones, and Nasdaq dipping by around 0.5%.
When asked at the stock exchange about which stocks investors should buy in anticipation of future growth, Trump declined to offer specific recommendations, explaining that he did not want to influence the market in a way that might lead to a dip. Instead, he reassured investors by stating, “Long term, this is going to be a country like no other.”
In conclusion, Trump’s visit to Wall Street highlighted the optimism surrounding his economic agenda, particularly among business leaders. While the stock market is performing well under his leadership, concerns remain about whether current economic conditions and policies can sustain this growth. The future will depend on how Trump’s administration navigates the challenges ahead, including inflation, slowing job growth, and the potential impact of his more controversial policies. The market’s trajectory remains uncertain, and it will take time to determine whether Trump’s economic vision will translate into long-term success or a potential downturn.
About The Author
