Is the stock market a good measure of Trump’s success?

Polls matter, but the stock market might be President Donald Trump’s favorite barometer of success. “Everybody’s profiting” when the markets rise, Trump said to reporters recently. That is not quite true. Rising stock prices have served as a consolation for the president, however, and shaky market responses to controversial policies have spurred him to shift course on tariffs and war with Iran.

‘Key measure of success’

The president “considers market reaction a key measure of success,” said The Washington Post. That metric helped spur the now scuppered attempts to end fighting with Iran. Markets have reacted badly to surges in fighting — the S&P plunged Monday after the U.S. reimposed a blockade on the Strait of Hormuz — but “every time we talked about the possibility of peace, the stock market shot up like a rocket ship,” Trump said to reporters last month as he explained his attempts to reach a deal.

Most presidents “play down the idea that they are susceptible to economic pressure” when making foreign policy, the Post said. But Iranians decided that Trump’s devotion to Wall Street and its negative reaction to the Strait of Hormuz closure “gave them leverage” to take a harder line and extract concessions, Brookings Institution’s Suzanne Maloney said to the outlet.

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Trump’s close attention to stock indexes “risks conflating the fortunes of ‌financial markets with the broader experience of U.S. households,” said Reuters. Roughly 40% of Americans “do not have money in the markets.” And the markets do not measure the health of private firms or small businesses that serve as the “backbone of the U.S. labor market.”

The stock market has grown by $15 trillion since the president began his second term, though that is mostly held by the richest 1% of the country. That suggests negative reaction to Trump policies seems to matter mainly “when corporate or financial interests are at stake,” Groundwork Collaborative’s Alex Jacquez said to Reuters.

‘Litmus test’

The president’s new “Trump accounts” for newborns are expected to draw more young Americans into “long-term wealth-building” via stock markets, said Yahoo Finance. But the markets are “not the litmus test the American public wants” from the presidency, Ali Vitali said at MS NOW. Trump’s recent financial disclosures revealed “billions in wealth growth for the president and his sons” but the voters “standing at gas stations” and paying higher prices at the pump probably find it “unfair.”

Stock investors have figured out to “pounce” when Trump shows signs of “buckling” on unpopular decisions, Katie Martin said at the Financial Times. But the bond markets that buy and sell federal debt are telling a different story about Trump’s policymaking. U.S. bonds have “never recovered from the drop in price” they experienced at the start of the Iran war. And there are signs that “large, conservative investors” are “reducing their exposure to risks around U.S. institutional credibility” and moving to Canadian and European bonds instead. That means American officials “will have to work a little harder” to keep attracting the bond investors they need to “balance the books.”