Trump's Stock Market "Victory": More Like a Big Tech Takeover
Okay, so Trump's back in office and the stock market's hitting "all-time highs." Big deal. The guy's already patting himself on the back, saying "That means we’re doing something right.” Give me a freakin' break.
Let's be real: this ain't about Trump's genius economic policies. It's about one thing: AI. Investors are throwing money at anything that smells like artificial intelligence, and that's inflating the whole damn market.
The AI-Fueled Mirage
This "humongous and unprecedented" AI investment cycle, as Argent Capital Management's Jed Ellerbroek calls it, is "overwhelming any and all of those things." Tariffs? Trade wars? Who cares when Nvidia's stock is going to the moon?
Nvidia, by the way, now accounts for 8% of the entire S&P 500. Eight percent! That's insane. It's like saying the Teenage Mutant Ninja Turtles are carrying the entire weight of pop culture now. Wait, maybe that's not a bad analogy, actually... but I digress.
And here's the kicker: the equal-weighted S&P 500 is only up 6% in the last year. Meaning, if you strip out the big tech companies, the market's barely moving. So, yeah, Trump can brag about "all-time highs," but it's a hollow victory. It's like winning a race because you're riding a rocket while everyone else is on bicycles.
The Tariff Tango and Treasury's Tightrope Walk
Remember those tariffs Trump was threatening? The ones that sent the market into a 19% nosedive back in April? Turns out, those were mostly bluster. The administration "walked back its most severe proposals," and the market breathed a sigh of relief. Mark Malek from Siebert Financial even admits that "Were it not for the tariff-driven swoon earlier this year, markets would likely be even higher today." So, basically, the market's up because Trump didn't do something stupid. That's our new benchmark for success?
And don't even get me started on Treasury Secretary Scott Bessent. He told the Financial Times that "You’ve got to respect the market." Respect the market? What is this, some kind of weird Wall Street religion? Maybe they should start wearing those MTG teenage mutant ninja turtles masks on the trading floor.
Then again, maybe I'm the crazy one here.
The Inevitable Correction (Maybe?)
Ross Mayfield from Baird says the administration "largely delivered on a lot of those things that investors were so bullish about." Okay, fine. But even he admits that a "correction" is coming – a 10% to 15% drop in the next year. Goldman Sachs CEO David Solomon is even more pessimistic, predicting a 10% to 20% drawdown.
So, what happens when the AI bubble bursts? What happens when investors realize that not every company can be the next Nvidia?
The S&P 500 continues to hit record highs, but it leaves everyday investors and 401(k)s increasingly exposed to enormous gains, but vulnerable to a downturn.
So, What's the Real Story?
This whole thing is a house of cards built on hype and cheap money. Trump's taking credit for something he barely understands, while ordinary people are left holding the bag when the inevitable crash comes. It ain't a victory. It's a setup.