Don’t be fooled — Trump’s stock market is a 'lousy' dud: analyst

What happened

AlterNet reports that the S&P 500 reached a record high, but Bloomberg analyst Jonathan Levin argued that the gain was concentrated in a handful of artificial-intelligence companies, including Meta, Microsoft and Nvidia. His answer to the headline’s implied question is blunt: the market looks strong at the index level while remaining “lousy for most” companies and households.

Levin pointed to five months of declining inflation-adjusted average hourly earnings, weaker consumer spending and falling stocks across consumer, travel, transportation, real-estate and financial sectors. He also cited a Federal Reserve Bank of New York report showing that Americans expected their earnings growth to trail consumer inflation over the following 12 months.

The danger, in Levin’s account, is not confined to wealthy AI speculators. With roughly $23 trillion in assets indexed or benchmarked to the S&P 500 as of 2025, a reversal in AI stocks could damage retirement accounts, consumption and employment. He did not establish when such a reversal might occur; he warned that the market’s concentration makes the consequences potentially severe.

An index is not an economy

Trump treats stock prices as a verdict on his presidency because the S&P offers a flattering number stripped of distributional context. But an index driven upward by a few enormous companies says little about whether wages cover groceries, fuel and housing. It measures the market value of selected corporations, not the material security of the population.

That distinction is especially important when inflation-adjusted pay has been losing ground. A record index beside shrinking purchasing power is not a paradox. It is evidence that financial performance and household welfare can diverge sharply.

Who holds the power

The institutional power here belongs to the White House, Congress, the Federal Reserve and the financial firms directing vast pools of capital. Households with retirement accounts participate in the market, but they do not set tariffs, fiscal policy, interest rates or the investment fashion concentrating trillions of dollars around AI.

According to Levin, the White House was seeking ways to restore tariffs that the Supreme Court had deemed illegal. If implemented, those measures would be a policy choice with foreseeable price effects—not an economic weather event and not something consumers caused by shopping incorrectly.

The political sales job

The misdirection is to present the market’s headline number as shared prosperity. That lets political leaders claim credit for gains concentrated among a few companies while treating inflation, weak real wages and reduced spending as separate complications.

The story’s own framing occasionally slips into the same trap by calling this “Trump’s stock market.” Presidents influence economic conditions, but they do not personally control equity prices. The sharper charge is narrower: Trump is using a concentrated market rally as political evidence while his administration pursues policies that Levin describes as inflationary.

Risk flows downward

AI investors may capture extraordinary gains while enthusiasm lasts. If sentiment breaks, however, the exposure extends through index funds, retirement plans and an economy partly supported by wealth-driven spending. The people absorbing those losses would include workers who never chose a concentrated bet on AI.

That is the recurring arrangement: upside is described as proof of elite competence, while downside is dispersed through pensions, jobs and household balance sheets. Those with the least control over the wager are still made vulnerable to it.

The systemic error

This episode reveals a political economy organized around legible financial symbols rather than broadly shared security. A rising index becomes propaganda because it is simple, immediate and useful to those in power; declining real earnings require harder questions about who benefits from policy.

The deception does not require falsifying the market high. It requires promoting that true number as an answer to a different question: whether most people are doing well. On the evidence AlterNet presents, it is not.

Thanks to Alter Net

Source: Don’t be fooled — Trump’s stock market is a ‘lousy’ dud: analyst