8.3 Trillion Reasons the Trump Bull Market Is Running on Borrowed Time
Key Points
The Dow Jones Industrial Average, S&P 500, and Nasdaq Composite have generated outsize annualized returns with Donald Trump in the White House.
However, total financial assets tied up in ultra-safe money market funds catapulted to an all-time high in the first quarter.
This flight to safety indicates clear skepticism about the Trump bull market.
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Although the Dow Jones Industrial Average (DJINDICES: ^DJI), S&P 500 (SNPINDEX: ^GSPC), and Nasdaq Composite (NASDAQINDEX: ^IXIC) typically rise under most presidents, their annualized returns with President Donald Trump in the White House have been well above average. The rise of artificial intelligence (AI), coupled with Trump's favorable corporate income tax policies, has fueled growth on Wall Street.
But the Trump bull market appears to be running on borrowed time. While a laundry list of headwinds exists on Wall Street, including historically pricey valuations and record margin debt, it's a quarterly reported economic data point that strongly suggests a course correction is coming.
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The stock market has thrived under President Trump. Image source: Official White House Photo by Daniel Torok.
Investors are piling into money market funds at a historic pace
In mid-June, the Board of Governors of the Federal Reserve released the quarterly update on total financial assets held in money market funds. A money market fund is a type of mutual fund that invests in extremely safe assets, such as short-term U.S. Treasury bills and certificates of deposit (CDs).
Investors park their money in money market funds for two purposes: income and stability. There's virtually no risk to principal in U.S. Treasuries and CDs, and yields are often highly predictable.
Although we'd expect the amount of capital invested in money market funds to grow over multiple decades, it's more advantageous to own fixed-income assets when interest rates rise. For example, when the Fed raised interest rates by more than five percentage points between March 2022 and July 2023, it was only natural to see investors pile into money market funds.
$8.3 Trillion is now sitting in money market funds, an all-time high 🚨 🤑 💰 pic.twitter.com/a63K7h0ell
-- Barchart (@Barchart) August 5, 2026
However, the latest money market fund data follows a worrisome trend.
During the first quarter of 2026, total financial assets held in money market funds ballooned to an all-time high of $8.29 trillion. Even though we'd have expected capital to flow out of money market funds when the Federal Open Market Committee (FOMC) began cutting interest rates in September 2024, inflows never slowed. Despite yields on fixed-income assets declining, investors have continued to pile in -- and that's a big-time worry.
Image source: Getty Images.
Investors are clearly skeptical about the Trump bull market
Since the second quarter of 2022, total assets in money market funds have surged 65%. This suggests that investors aren't convinced the AI-powered Trump bull market has staying power and want to protect their principal.
History offers investors little reassurance about the evolution of AI. While empowering software and systems with the tools to make autonomous, split-second decisions is a multitrillion-dollar opportunity, history shows that every game-changing technology has taken several years to mature. This lengthy pace of optimization, which investors always seem to overshoot, leads to the bursting of bubbles with next-big-thing technologies.
Historical precedent points to valuations also being unsustainable. The S&P 500's Shiller Price-to-Earnings (P/E) Ratio, also known as the Cyclically Adjusted P/E Ratio (CAPE Ratio), nearly tipped the scales at 43 in early June. It's the second-priciest valuation multiple since January 1871.
Stock Market Shiller PE Ratio on the verge of taking out its Dot Com Bubble all-time high 🚨 🤯 👀 pic.twitter.com/CtCmSgWnLt
-- Barchart (@Barchart) July 11, 2026
Additionally, the president is a wildcard. The ongoing Iran war threatens to entrench above-average inflation, increasing the likelihood that the FOMC could hike interest rates.
Even though the stock market has rocketed to new heights, money market fund data indicate that investors are flocking to safety. That's potentially terrible news for the pricey Trump bull market.
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