Trump Policies May Hinder Stock Market Growth Despite Expectations

President Donald Trump has expressed his expectation that the stock market will continue to rise and 'go through the roof,' but some of his own policies may hinder this growth. Despite recent gains, including a 57% increase in the Dow Jones Industrial Average during his first non-consecutive term, there are concerns about the impact of tariffs and trade policy on inflation.

The Tax Cuts and Jobs Act, signed into law by Trump in December 2017, has been beneficial for businesses, but the administration's tariff and trade policy is pushing the US inflation rate above 2%. A new round of tariffs was imposed on over 80 countries, with some economists arguing that input tariffs drive manufacturing costs higher.

The Iran war is also contributing to above-average inflation, with fuel prices rising due to the closure of the Strait of Hormuz. The Federal Reserve's preferred measure of inflation, Core PCE, moved up to 3.4% in May, the highest level since October 2023.