Larry Kudlow's "Trump Boom" Analysis: Market Performance vs. Policy Reality

This analysis is based on the Fox Business opinion piece [1] by Larry Kudlow published on November 11, 2025, which argues that stock market gains signal a “Trump boom” driven by Trumpian economic policies.

Kudlow claimed significant market gains since April 2025 following “tariff confusion” - Dow up 27%, NASDAQ up 53%, and S&P up 37% [1]. Market data confirms strong gains but with notable variations from these figures [0]:

• S&P 500
  : +22.41% (April 1 to November 12, 2025)
• NASDAQ Composite
  : +35.90% (same period)
• Dow Jones Industrial
  : +15.42% (April to November 2025)
• Russell 2000
  : +22.47% (during this period)

The actual performance shows robust gains across major indices, with NASDAQ leading as expected from technology sector strength, though Kudlow’s figures appear somewhat inflated.

Kudlow attributes market strength to tax cuts, deregulation, and energy production increases [1]. However, external research reveals a more complex policy landscape:

• Extensions of 2017 Tax Cuts and Jobs Act provisions [3]
• Continued focus on reducing business regulations [3]
• Push for increased domestic energy production [1]

• Trump imposed 25% tariffs on Canada and Mexico and 10% on China in February 2025 [2]
• These tariffs represent “the largest US tax increase as a percent of GDP (0.54 percent for 2025) since 1993” [2]
• Recent government shutdown ended after 43 days, described as “the longest government shutdown in US history” [4]

Recent sector performance shows mixed results [0], challenging the uniform boom narrative:

• Communication Services
  : +1.22% (leading)
• Basic Materials
  : +0.53%
• Healthcare
  : +0.53%
• Technology
  : -1.00% (underperforming)
• Energy
  : -1.22%
• Consumer Cyclical
  : -0.68%

The technology sector’s recent underperformance is particularly noteworthy given Kudlow’s emphasis on AI and advanced technology investments.

The stock rally appears driven by multiple interconnected factors:

1. Corporate Earnings Strength
   : Supporting equity valuations across sectors
2. Technology Investment
   : Continued AI and tech investment despite recent volatility
3. Policy Expectations
   : Market optimism about tax benefits and deregulation
4. Economic Recovery
   : Post-pandemic normalization and government shutdown resolution

Kudlow mentions the end of the “Schumer shutdown” as positive for growth [1]. The 43-day shutdown indeed created significant economic disruptions, particularly in air travel and federal services [4]. The market’s resilience during this period suggests underlying economic strength, but the shutdown likely created temporary drag that may have masked some positive policy effects.

The most significant contradiction in Kudlow’s thesis involves tariffs. While claiming growth-oriented policies, the administration’s trade actions represent substantial tax increases [2]. This creates a complex dynamic where corporate tax cuts may be partially offset by increased import costs, particularly affecting manufacturing and consumer goods sectors.

1. Trade Tension Escalation
   : Tariffs could disrupt supply chains and increase consumer costs [2]
2. Policy Uncertainty
   : Rapid policy changes may create market volatility
3. Data Gaps
   : Limited official economic statistics during government shutdown period [1]
4. Sector Rotation
   : Recent technology underperformance could signal broader market shifts

1. Post-Shutdown Recovery
   : Economic normalization as government operations resume [4]
2. Corporate Investment
   : Potential CapEx surge if tax cuts translate to business spending
3. Energy Sector
   : Domestic production increases could benefit related industries
4. Market Momentum
   : Strong technical performance suggests continued positive sentiment

The timing of this analysis is critical as markets adjust to:

• Post-shutdown economic data releases
• Q4 2025 earnings season guidance
• Federal Reserve responses to emerging economic conditions
• Trade policy implementation effects

Larry Kudlow’s “Trump boom” narrative captures genuine market strength since April 2025, with all major indices posting double-digit gains [0]. However, the relationship between policy and performance appears more nuanced than presented. While tax cuts and deregulation likely contributed to corporate optimism, tariffs represent significant cost increases that could offset some benefits [2].

The market rally reflects multiple factors including policy expectations, corporate earnings strength, and economic recovery patterns. Recent sector performance shows mixed results, with technology underperforming despite policy emphasis on AI and advanced technology [0].

Decision-makers should monitor both positive momentum indicators and potential policy headwinds, particularly regarding trade tensions and the full economic impact of recent policy changes once complete data becomes available following the government shutdown resolution [4].