History Says There Are $8.44 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 delivered outsize gains with President Donald Trump in the White House.
Total financial assets held in super-safe money market funds blasted to an all-time high in the second quarter.
Historically, parabolic moves in money market fund inflows have preceded big declines for stocks.
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From a purely statistical standpoint, Wall Street has thrived under President Donald Trump. During his first, non-consecutive term, the timeless Dow Jones Industrial Average (DJINDICES:^DJI), benchmark S&P 500 (SNPINDEX:^GSPC), and tech-focused Nasdaq Composite (NASDAQINDEX:^IXIC) gained 57%, 70%, and 142%, respectively. We've witnessed something of an encore performance since the beginning of his second term in January 2025.
The Trump bull market is being fueled by the artificial intelligence (AI) infrastructure build-out, much better-than-expected corporate earnings, and record share buybacks. The president's first-term tax-and-spending law, the Tax Cuts and Jobs Act (signed into law December 2017), spurred the latter by reducing the peak marginal corporate income tax rate to 21%, the lowest level since 1939.
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Image source: Official White House Photo by Daniel Torok.
But things may not be as perfect for the stock market as the Dow's, S&P 500's, and Nasdaq Composite's gains imply. An ominous $8.44 trillion figure with historical precedent at its back looms large, implying that the Trump bull market is operating on borrowed time.
A historic amount of capital is flowing into money market funds
At any given moment, several headwinds are threatening to upend Wall Street's AI-driven rally, including a surge in outstanding margin debt and historically pricey stock valuations. But it's a newly released data point by the Board of Governors of the Federal Reserve that should have the Trump bull market shaking in its proverbial boots: total financial assets held in money market funds.
Money market funds are a type of mutual fund that invests in super-safe assets, such as short-term Treasury bills. When investors put their money to work in a money market fund, they're typically looking to preserve capital and generate ultra-safe interest income.
According to the latest Fed data, total assets held in money market funds leaped to a new all-time high of $8.44 trillion in the second quarter of 2026.
A staggering $8.44 Trillion is now sitting in Money Market Funds, a new all-time high 🚨 🤑 💰 pic.twitter.com/Zi1h1G4Zjb
— Barchart (@Barchart) September 28, 2026
Ideally, investors would want to pile into money market funds when yields on fixed-income assets are climbing. For example, when the central bank aggressively tackled the surge in inflation following the COVID-19 pandemic, the federal funds target rate jumped by 525 basis points from March 2022 to July 2023. This pushed up Treasury bill yields and made money market funds more attractive.
At the same time, we'd expect money market fund inflows to slow or shift to outflows if yields are declining. If yields drop, stocks often become more attractive. When the Fed enacted six interest rate cuts from September 2024 to December 2025, lowering fixed-income yields, we'd have expected to see capital flow out of money market funds and into stocks. But this isn't what happened.
Money market fund inflows have remained exceptionally strong, indicating that investors would rather have the security of a 4% ultra-safe return on their principal than put their money to work in the second-priciest stock market in history. That's a big problem for the Trump bull market.
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
Furthermore, parabolic increases in total assets held in money market funds have historically preceded significant declines in the Dow Jones Industrial Average, S&P 500, and Nasdaq Composite. Assets held in money market funds surged 86% in less than three years as the financial crisis unfolded and more than doubled from the midpoint of 1996 to the bursting of the dot-com bubble in the first quarter of 2000.
Money market fund investors are telling a chilling tale of what may come for the Trump bull market.
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