Rate Hikes Threaten Trump's Economy: A New Danger for US Stock Market

The US stock market has enjoyed unusually high returns under President Trump's administration. The Dow Jones Industrial Average, S&P 500, and Nasdaq Composite have consistently generated outsize returns during his presidency.

The main driver of this growth is the artificial intelligence infrastructure build-out, which has led to a surge in demand for graphics processing units (GPUs) and high-bandwidth memory (HBM). Companies like Nvidia and Micron Technology have seen their gross margins skyrocket as a result.

However, a new threat to the market has emerged: the Federal Reserve's rate-hiking cycle. The Fed began raising interest rates on September 16, which could squash the stock market's leading catalyst and slow down AI growth rates.