Welcome to The Poverty Trap, a newsletter and podcast for people who are fed up with the inequality baked into America’s system and want to individually and collectively make change.
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One Big Issue:
Investment in the stock market is skewed heavily toward the wealthy and white. The most recent statistics as of April 2026 show that 58% of U.S. adults own stock (down from 62% in 2025), but the top 10% of Americans by net worth own 87% of that stock, while the bottom 50% of Americans by net worth own only 1% of stock. Structuring the same data in more stark terms, the top 1% of Americans by net worth own more stock than the bottom 90% of Americans, combined.
Breakdown of stock ownership by race shows another disparity: there is a massive gap between white Americans, who own approximately 87% of stocks, and Black Americans, who are 13% of the U.S. population and own 0.7% of stocks, while Hispanic Americans also own 0.7% of stocks, but make up 18.9% of the U.S. population.
This startling analysis from The New School, Institute on Race, Power and Political Economy demonstrates the racial wealth divide well beyond stock market investments, and offers specific changes to our country’s policy choices that could at least partially reverse this inequality.
Why It Matters:
President Trump’s decision-making for most issues seems to revolve around how the stock market reacts—from tariffs to the war in Iran—the President looks to the response of the market to make major economic and other policy decisions. But how the stock market goes is not necessarily a reflection of how our economy goes. And policy decisions made to help the stock market reach stratospheric heights don’t necessarily benefit the majority of Americans or our country. What might be even worse is that the President himself, his family and administration are heavily invested in the stock market. So is this administration making decisions for the entire country that only benefit the white and wealthy, including him and those closest to him?
As the Nobel-winning economist Paul Krugman has explained more than once: “The stock market is not the economy”. The basic reasoning, translated by Investopedia in a recent article, is that “the stock market tracks the value and expected future earnings of publicly traded companies, while the economy comprises all U.S. production, consumption, employment, and commerce.” A soaring stock market doesn’t mean the overall economy and the 330 million people who are part of that economy are doing well financially, and vice-versa.
But according to a Washington Post article published a couple of weeks ago, President Trump admitted the stock market was his oracle and even guided his foreign policy decisions:
“The stock market is more brilliant than anybody there is, including the people on this stage, other than me, of course,” he said, flanked by Secretary of State Marco Rubio, Treasury Secretary Scott Bessent and other top administration officials….
“I didn’t want to see economic catastrophe,” Trump told reporters gathered in the Alpine spa town of Évian-les-Bains, France, after the Group of Seven summit. “If you kept this [the Iran war] going, that could have happened, but all I know is every time we talked about the possibility of peace, the stock market shot up like a rocket ship.”
The Post article also reported the president’s own investment in the stock market:
In his second term, he has shattered ethical norms for modern presidents by maintaining an active portfolio in the market. His investment accounts made more than 3,600 transactions worth hundreds of millions of dollars in the first quarter of 2026, according to an analysis by CBS News.
Here is a comprehensive summary of President Trump’s 3,600 stock market trades for the first three months of 2026 published by CBS News: https://www.cbsnews.com/projects/2026/trump-stock-trades/. And a CBS video discussing the issue:
Today’s booming stock market, caused mainly by AI investment, is “driving a record share of American wealth…” says Axios in an analysis published earlier this month.
A record 33% of the total wealth of the U.S. household sector was in stocks at the end of 2025, according to Federal Reserve data.
That beats the ~30% during the meme stock-and-SPAC mania of 2021.
And tops the ~27% reached in Q1 2000, just as the internet boom peaked.
Yet, the report acknowledges the wealth isn’t distributed evenly—not even close:
The big picture: This uneven distribution helps explain some of the peculiar features of the current economic and political environment.
For instance, the so-called K-shaped economy, in which GDP growth is increasingly reliant on spending by the wealthy, is likely driven in part by wealth effects of stock market gains for these folks.
In other words, the rich seem to be feeling especially flush and are willing to spend.
Meanwhile, 90% of the population hasn’t benefited from the booming market — even as relatively high inflation shrinks their real disposable income.
Again, for the majority of Americans, and especially Black and Hispanic Americans, this “driver of wealth”—the stock market—means next to nothing.
I’d love to hear what you think about stock market investment in general—who it benefits and who it doesn’t—and President Trump’s unprecedented stock market trades this year. Just leave your thoughts in the Comment Section below.
