War, inflation and Trump’s tariffs have shaken the US. Why does the stock market keep going up?
Summary
Despite ongoing problems like war with Iran, high oil prices, inflation, and trade tensions under President Trump, the US stock market has not only recovered from recent losses but is growing strongly. Investors remain confident partly because they believe the government and Federal Reserve will step in to help if financial trouble worsens.Key Facts
- On 27 March, the Dow and Nasdaq fell more than 10% from their peak due to rising oil prices and war concerns with Iran.
- By 13 May, the situation with Iran showed little improvement, but stock markets were thriving.
- Nasdaq has increased about 11% since the start of the year, driven by tech investments, especially in AI.
- The Dow and S&P 500 indexes are close to their record high levels.
- Investors expect President Trump to soften extreme policies, like tariffs, which has lessened market fears (called “Taco”).
- Economists believe markets are confident because they expect federal government and Federal Reserve support during financial crises.
- Inflation remains high at 3.8% in April, affecting lower-income Americans more than wealthier ones.
- Recent bank failures showed risks in the financial system, partly because of weak regulation and supervision.
Read the Full Article
This is a fact-based summary from The Actual News. Click below to read the complete story directly from the original source.