The Trump stock market surge is Kamala Harris’ final humiliation
There are still two months to go until Donald Trump takes up residence in the White House. None of his Cabinet picks has started in office, nor even been approved by Congress. And beyond the slogans of the campaign trail, many of the administration’s plans, to put it kindly, have still to take concrete shape.
Yet despite all that, one point is perfectly clear. The Trump boom has already started. The Left, including its recent standard bearer Kamala Harris, is once again being reminded that economic growth depends on confidence among businesses, and appetite for risk among entrepreneurs, far more than it does on the government – and by recognising that, Trump has already triggered a revival that will carry well into the new year.
The evidence is everywhere. The stock market has been surging, with the Dow Jones Index hitting a record high at the end of the last week, and the S&P 500 and the Nasdaq both rising strongly. The dollar is higher. Anecdotally, businesses are preparing a wave of investment, and foreign firms, such as Sweden’s Klarna – one of the very few tech successes to come out of Europe – are preparing to list in New York instead of their own countries.
“The business community is giddy with excitement about the Trump administration,” wrote the hedge fund manager Bill Ackman on X. “Growth is about to explode.”
True, the liberal-Left will mourn the demise of “Bidenonomics”, and fret that without the massive subsidies it dished out, and the industrial planning it championed, the American economy will stagnate and fall behind the rest of the world. In fact, they always misunderstood what genuinely drives innovation and growth. There are four reasons why the Trump boom is already underway.
First, the pro-business, pro-entreprise stance of the new administration is a huge relief after the state-led, high regulation, big subsidy model of the Biden White House. Sure that was great if you were one of the companies lucky enough to get a billion dollars for a few EV chargers, but most businesses prefer selling real products to real customers to endlessly negotiating grants with government officials.
Simply having people who understand that basic point back in charge has fired up America’s animal spirits. Meanwhile, the emphasis on energy independence means cheap power is surely guaranteed, and that matters far more to manufacturing than government bungs.
Next, the impact of tariffs will be uncertain, but one consequence is clear. Companies will shift production to the US ahead of their imposition to prevent their products being hit by additional levies. Plenty of new factories and warehouses will have to be built to get around them, and the plans for that have already started.
Thirdly, finance and industry like the look of Scott Bessent as Trump’s Treasury Secretary. Bessent is widely viewed as a safe pair of hands, who will emphasise deregulation instead of tariffs as the best way of boosting American competitiveness. He is a moderate conservative, and not a radical, and that has reassured the markets that not too many risks will be taken with the economy. But if he is too cautious, Elon Musk will always be hovering in the background, with his trademark grin, to juice up the agenda.
Finally, planned tax cuts will drive investment and spending, and companies are gearing up for that. Locking in lower corporate taxes instead of the increases the Democrats were planning will free up cash for investment elsewhere.
Yes, the policy mix may over-stimulate the economy, and it could end up with a crash. At some point, although it won’t come to him naturally, President Trump may need to press pause on the boom. But for now his victory has already fired up the economy – and that will prove a powerful start to his second term.