Trump's Policies Put Stock Market at Risk of Tumbling

Under President Donald Trump's administration, the stock market has experienced significant growth, with the Dow Jones Industrial Average, S&P 500, and Nasdaq Composite seeing annualized returns higher than under most other presidents since the late 1890s.

The Tax Cuts and Jobs Act, signed into law by Trump in December 2017, lowered the peak marginal corporate income tax rate from 35% to 21%, allowing companies to retain more of their earnings and drive record share buybacks and investment in high-growth initiatives like artificial intelligence (AI).

However, some of Trump's policies have Wall Street primed for disaster. His tariff and trade policy has pushed the US inflation rate well beyond 'modest', with the recent round of tariffs on more than 80 countries ranging from 10% to 12.5%. The Iran war is also having an adverse impact on the prevailing inflation rate, with fuel prices rising rapidly due to the closure of the Strait of Hormuz.

The Trump administration's policies may prevent the stock market from reaching new highs, despite the president's expectation that it will 'go through the roof'.