How might markets dropping impact Americans?published at 16:55 British Summer Time
Natalie Sherman
New York business reporter
Markets are panicked by Trump’s tariffs – and there’s no
question why.
The plans have introduced a huge new cost for many companies,
one that is sure to shrink their profits, if not wipe them out entirely.
That’s bad news for everyone invested in the stock market,
which polls suggest amounts to about 60% of Americans, thanks to exposure in
retirement accounts.
That does not, however, mean that 60% of Americans are poised for huge
losses.
The wealthiest Americans own the most stock – in fact, the
Federal Reserve estimates that about 90% of the markets’ trillions are owned by the
top 10% wealthiest Americans, who as of 2022 had typical holdings worth more
than $600,000 (£471,230).
By comparison, those in the bottom half of the wealth
distribution typically had only about $12,600 tied up in the markets.
That can explain why it is not difficult to find some voices
who are feeling relatively sanguine about the market turmoil, as my colleague Mike Wendling uncovered.
On the other hand, if the market falls prompt the wealthy to
hunker down and save, it could have big effects on the wider economy, much of
which relies on their spending.