“The stock market has smashed one record after another, gaining $8 trillion in value,” President Trump noted during his State of the Union address. “That is great news for Americans' 401(k), retirement, pension, and college savings accounts.”
The president was as enthusiastic in saying this, which he had been saying in some version for months, as Democrats, sitting on their hands, were sour at hearing it.
A week later, a plummeting stock market had made mincemeat of Trump's claims, at least as far as the market indices are concerned. The Dow Jones Industrial Average closed nearly 2,000 points below where it had been when Trump was at the podium in the House of Representatives.
But this is not a calamity, just a lesson to a new president not to pin prestige to market capitalization. And the market still closed higher on Tuesday than it had ended 2017. The Dow is still up 32 percent since the day Trump was elected. But this has been a very unpleasant week for those watching their retirement and pension funds closely.
The market is suffering from the traditional problem that comes with good economic news. Last week’s jobs report was stronger than expected, which prompted Wall Street to worry about the advent of higher interest rates as the Federal Reserve gets back to its historical norm rather than remaining in the defensive crouch that has been its posture since the start of the Great Recession a decade ago.
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04.25.2024