Podcast Summary: The Daily – "Why the Stock Market Just Keeps Going Up"
Date: October 20, 2025 | Host: Natalie Kitroeff | Guest: Joe Rennison
Overview
In this episode, NYT journalist Natalie Kitroeff sits down with Joe Rennison to unravel a central economic paradox: Why have U.S. stock markets, notably the S&P 500 and Nasdaq, soared to record highs in 2025—despite persistent turbulence caused by high tariffs, weakening labor data, and President Trump’s interventions in economic institutions? Rennison provides a layered exploration of the forces keeping markets buoyant, including the huge influence of AI-driven tech giants, investor psychology, and key signals that hint at potential vulnerabilities beneath Wall Street's surface.
Key Discussion Points & Insights
1. The Stock Market’s Paradox: Resilience Amidst Turmoil
[00:21–02:43]
- Despite economic “chaos”—high tariffs, weak labor market, and unorthodox government intervention—U.S. stock indexes remain at all-time highs.
- Host Natalie asks the foundational question: “How can it be that all these theoretically destabilizing events are not seriously rattling investors?”
Quote:
“It seems as though every few weeks something happens... and at least for the past few months, the market has not really had a huge or lasting reaction to those things.”
– Natalie Kitroeff [01:51]
2. Market Psychology: Signals and Interpretation
[02:43–04:58]
- Rennison emphasizes that the majority of Americans are exposed to the stock market, and that markets often serve as a forward-looking barometer, not a mirror of current economic conditions.
- “Markets are constantly trying to understand where we go, not where we are now.”
Quote:
“The companies in the stock market...employ thousands and thousands of people...there is this kind of relationship between markets and the economy, even if they don’t always send exactly the same message.”
– Joe Rennison [03:37]
3. How Markets “Digest” Uncertainty
[04:58–07:43]
- Initial sharp reactions to Trump’s tariffs gave way to stability as uncertainty faded and key parameters (tariff rates, inflation data) became more predictable.
- Markets dislike unpredictability more than “bad news,” and have learned to adapt as new policies become familiar.
Quote:
“Markets hate uncertainty. They can’t price uncertainty...It’s impossible to price what you don’t know.”
– Joe Rennison [05:48]
4. Policy Tailwinds: Tax Cuts & Lower Interest Rates
[07:43–08:47]
- Recent economic policy (tax cuts and Federal Reserve rate cuts) has provided “tailwinds” to stocks, lowering borrowing costs and boosting corporate profitability.
- Rennison: “These are two things that businesses love...These are good news.” [08:10]
5. Institutional Attacks & Market Indifference
[08:47–10:07]
- While there are concerns about attacks on the Fed and other institutions, markets are primarily concerned with outcomes—policies aligning with fundamentals—rather than the independence or health of institutions.
6. The AI Boom: Tech Giants Dominate Market Performance
[11:11–14:54]
- The rise of “The Magnificent Seven” (Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia, Tesla) underpins much of the market’s gains. These firms, heavily exposed to artificial intelligence, now make up more than a third of the S&P 500’s value.
Quote:
“There’s 500 companies. Seven of them are dictating a third of the price.”
– Joe Rennison [12:03]
- This concentrated performance means the overall market can rise even as many companies lag.
7. Bubble or Revolution? Debating AI Valuations
[13:16–15:59]
- AI-driven stocks, especially Nvidia, are trading at sky-high valuations; this is reminiscent of the dot-com era, but could be justified if the underlying technology delivers as hoped.
- Investors face a dilemma: risk missing out on a generational opportunity or get caught in a bubble.
Quote:
“With almost any big fundamental change…to some extent...it comes down to belief.”
– Joe Rennison [14:54]
8. Masked Weakness: Not All Boats Are Rising
[16:00–17:08]
- The stellar performance of a small group of tech firms can conceal weakness among the rest; broad index gains may mislead about underlying market health.
Quote:
“Maybe it’s also just artificial intelligence…you may be missing some of the underlying concern that still sits beneath the surface.” [16:59]
9. Underlying Warning Signs
[18:53–22:31]
- Rising gold prices and movement of international capital out of the U.S. suggest unease.
- Defaults are rising in subprime auto lending, hinting at consumer stress; if this spreads, it could hurt broader consumption and corporate earnings.
- Ongoing U.S.–China trade tensions remain a persistent source of risk.
Quote:
“Why do people buy gold? ...You go there because you don’t want to lose money.”
– Joe Rennison [18:59]
10. So, Should We Be Worried?
[22:31–27:16]
- Rennison cannot predict whether the rally will last, emphasizing that, for now, fundamentals haven’t collapsed and company earnings, particularly among tech, remain strong.
- Some policies and levels of intervention appear to have become “normalized,” and investors have adapted by focusing on concrete outcomes rather than political “noise.”
11. Best Performers Since Tariffs
[28:36–29:12]
- Companies like Broadcom, Palantir, and Oracle have more than doubled since April, with government business cited as a key driver.
Quote:
“There’s seven companies on here that have risen more than 100% since the start of April…Broadcom, Palantir, Oracle…It’s pretty staggering.”
– Joe Rennison [28:49]
Memorable Quotes & Moments
-
On investor psychology:
“The risk of being uninvested in this environment is like you can fall behind very, very quickly.”
– Joe Rennison [15:13] -
On Trump’s impact:
“I think investors have really started to try not to react to those more superfluous things and instead focus on what’s real, what’s actually happened, what’s actually been said and done, rather than what might happen.”
– Joe Rennison [26:24] -
Summing up the mood:
“You actually end up just having to look at what’s really happening. Not the sort of gut check or emotional response…”
– Joe Rennison [27:16]
Key Timestamps
- 00:21–02:43: Introduction of the stock market’s resilience
- 04:58–07:43: How markets adapted to Trump’s tariffs
- 11:11–14:54: Power of AI and tech firms in driving market performance
- 18:53–20:16: Gold’s surge and signals of investor anxiety
- 21:28–22:31: U.S.–China trade war’s persistent risks
- 28:36–29:12: Top stock performers since tariff escalation
Conclusion
The U.S. stock market’s 2025 rally rests on a convergence of factors: the predictability of current policies, the enormous gravitational pull of AI-focused tech giants, and investors’ adaptation to political “noise” and uncertainty. Underneath, however, traditional warning lights—rising gold prices, growing consumer defaults, geopolitical risks—remain flashing. While investors are enjoying unprecedented gains for now, the episode closes on a note of measured skepticism: markets are responding to present facts and future potential, not to our anxieties. Whether this “new normal” is sustainable remains an open question.