Chethana Janith, Jadetimes Staff
C. Janith is a Jadetimes news reporter covering science and geopolitics.
Donald Trump stood on Wall Street on Thursday, surrounded by a crowd of America’s business elite, and rang the bell to begin the morning stock market trading.
The atmosphere was celebratory. Not only had the president-elect just been named Time's Person of the Year, but the stock market, which had already been performing well, had surged to new heights since his election.
For Trump, who has kept a relatively low public profile since his election victory last month, the visit served as a reminder of how much importance he places on market sentiment.
However, whether his appearance will be seen as the start of another economic boom or a signal of trouble remains uncertain.
Trump is entering office with a U.S. economy that, according to Jerome Powell, the head of the Federal Reserve, is the envy of many nations. The economy is growing solidly at 2.8%, unemployment is near a historic low of 4.2%, and productivity is on the rise.
These factors have helped push American stocks to record levels. The Dow Jones Industrial Average is set to finish the year up more than 17%.
The S&P 500, which includes America’s 500 largest companies, has risen 28% since January, while the Nasdaq, which is heavily influenced by tech companies, has increased by more than 40%.
Investors are optimistic for more gains, with the Trump administration expected to ease regulations and approve mergers that might have faced tougher scrutiny under the previous administration.
At the stock exchange on Thursday, some of the biggest names in business, including Goldman Sachs CEO David Solomon and Target CEO Brian Cornell, were present. Trump was met with cheers and applause, followed by chants of "USA! USA!"
His visit was a relatively rare appearance by a sitting or former president at the exchange.
However, analysts have warned that these high levels may be difficult to maintain in the coming year.
Job creation is already slowing, and inflation remains stubbornly high.
Many of Trump’s priorities—such as cutting government spending, imposing broad trade barriers, and pursuing mass deportations of migrants—could present additional challenges to economic growth if implemented.
While there is ongoing debate about how much of his agenda will actually be enacted, these proposals are creating uncertainty and could lead to significant disruptions, according to Mark Zandi, chief economist at Moody's Analytics.
"If all of these policies are implemented as the president has outlined, I think they will be problematic for the economy," he said.
At the stock exchange on Thursday, Trump focused on other aspects of his agenda that are more favorable to the markets: his promises to lower corporate taxes from 21% to 15% for U.S. manufacturers, reduce regulations, and speed up government approvals.
"A nuclear power plant—I'd say a week would be enough time. What do you think?" he joked, to laughter from the crowd.
Similar policies, which Zandi said would benefit corporate profits, though not necessarily the broader economy, had previously boosted stock prices during Trump’s first term.
He often pointed to these gains as a measure of his administration's success, particularly at the start of his presidency.
But the market retreated during trade disputes with allies and China, then took a sharp dive at the start of the COVID-19 pandemic, before quickly recovering.
Ultimately, the S&P 500 rose more than 67% during his time in office—a record surpassed only by Bill Clinton in the 1990s and Barack Obama in his first four years.
Under President Biden, the index has risen 59% so far. Whether Trump can achieve similar results again remains uncertain.
On Thursday, the main U.S. stock indexes closed lower, with the S&P 500, Dow Jones Industrial Average, and Nasdaq all dropping by around 0.5%.
When asked at the stock exchange what investors should buy in preparation for the future, Trump, somewhat unusually, avoided making specific predictions.
"I don’t want to get into a situation where they do, and we have a dip or something," he said, before adding, "Long-term, this is going to be a country like no other."
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