War, inflation and Trump’s tariffs have shaken the US. Why does the stock market keep going up?
https://www.theguardian.com/business/ng-interactive/2026/may/14/us-stock-market-war-inflation-tariffs-trump?referring_host=Reddit&utm_campaign=guardianacct
Posted by guardian
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Hi r/economy, this is Jake from The Guardian US. We wanted to share this story that we published about how exactly the stock market keeps going up despite other instabilities in the economy.
*From our story:*
It was a dark Friday for Wall Street on 27 March. Oil prices were climbing and the war with Iran raged on. Markets responded accordingly, with the Dow and Nasdaq entering correction territory, falling more than 10% below their peak, after a month of selloffs.
Fast forward seven weeks later to 13 May, and the situation in Iran only looked marginally better. Oil prices were high, and the strait of Hormuz was still closed. Peace talks with Iran seemed tenuous, even with the pressures of high gas prices. Donald Trump on Wednesday [said](https://www.theguardian.com/us-news/2026/may/13/trump-iran-war-americans-finances) he is “not even a little bit” motivated by Americans’ financial situation to end the war.
And yet, stock markets have not only recovered from their losses – they are thriving.
Even before the start of the war, the US stock market proved incredibly resilient to political and economic instability. The market has shrugged off the Covid-19 recession and generational-high inflation, absorbed Russia’s invasion of Ukraine and increasingly turned a blind eye to Trump’s tariff spats. Everyday Americans continue to struggle with an affordability crisis and consumer confidence has crashed, but the markets just keep going up and up.
Yes, Wall Street still has its down days. But the tech-heavy Nasdaq index has continued to surge amid continued investment in AI. The index has gone up 11% since the start of the year – nearly half of the gains that it saw last year. The Dow and S&P 500 continue to bump close to record highs.
Each time investors shake off the latest shock and reach new highs, questions arise: what is driving this phenomenon, and how long can this bull market last?
[*You can read the full story for free at this link.*](https://www.theguardian.com/business/ng-interactive/2026/may/14/us-stock-market-war-inflation-tariffs-trump?referring_host=Reddit&utm_campaign=guardianacct)
The stock market has crashed if you take out the AI related stocks. So many blue chippers are at or near 52-week low – MCD, EFX, FICO, HD, POOL, SAAS stocks, just to name a few.
The market is not ignoring inflation, tariff, and war. It is putting money in businesses that they don’t think is affected by the Trump crazy.
because the wealthy are still wealthy enough to invest
Quite simple:
Where else you going to invest your money?
The stock market, particularly the mag7 are really the only game in town. Which should scare people.
As the Republicans are always quick to remind a Dem President, the stock market is not the economy. Funny how they forget that when GOP are in office.