What will stop the US stock market?

There have been factors which seem to have the ability to potentially drag down the US equities: rising interest rates, a possible global trade war, losing confidence in some Faang companies and a possible impeachment of the US president. However, it seems the US stock market has not been affected by these factors and the stock indices reach new peaks these days. Meanwhile, the Chinese stock market has been deeply affected by the worry of economic slowdown and the trade war with the US. Why is the US stock market so special?

The US stock market is the market where has the most valuable companies from all over the world. Not only the US tech giants are publicly listed on the US stock market, but also some companies from other countries are publicly listed on the US stock market, such as the Chinese tech companies, Alibaba and Baidu. It is the centre of publicly listed companies. This makes the US stock market be the centre of global equity investment. It has a large number of financial instruments which allow investors to conduct various investment strategies.

The strong performance of the US stock market attracts investors from other stock markets where have weaker performances. In addition, the returns of investing in American equities are very attractive, while the interest rates are relatively low (though some central banks are planning to increase interest rates), which makes American equities the best alternative to other assets (including bonds). Cash needs somewhere to be put in, and now around the global financial markets, the US equity market is the best place to put investors' money. When more cash flows into the US stock market, it will improve the performance of the US stock market further. Additionally, the US stock market seems independent of the current trade tension, because many of these American giants are multinational service providers which are affected by the trade policy less. Furthermore, even if a crisis hit the American economy, the entire world will be affected and no financial market will be exception; therefore, even under the worst case, the US stock market will not be worse than other stock markets.

Overall, because the US stock market becomes the best place for all types of investment, the US stock market becomes the centre of investment, leading to a stronger performance and further ensuring its status in the global financial market.