Kudlow says business is booming as Dow hits fresh record

Larry Kudlow's endorsement of the economy under Trump adds a political tailwind to a market already riding record highs.

Former Trump economic adviser Larry Kudlow declared the economy "booming" on Friday, adding a high-profile political endorsement to a rally that pushed the Dow Jones Industrial Average to a record 875-point gain this week.

"Trump loves business, and business is booming," Kudlow said in a public appearance on June 5, signaling confidence in the administration's economic trajectory.

The Dow closed at a fresh record on Thursday, surging 1.7% to lead major indexes higher, while the S&P 500 added 0.4%. The 10-year Treasury yield eased to below 4.48%, and gold climbed 0.9% to above $4,500 an ounce. West Texas Intermediate crude, the U.S. benchmark, settled at $93.20 a barrel, down nearly 3% after Israel and Lebanon renewed a ceasefire agreement.

Kudlow's statement comes as investors weigh competing signals. The labor market added 115,000 jobs in April, more than double economists' estimates, though the May report due Friday is expected to show a slowdown to 80,000 positions with the unemployment rate holding at 4.3%. The Federal Reserve's Beige Book, released Wednesday, flagged rising inflation concerns tied to higher fuel costs from the Iran conflict, with business contacts across the country reporting that transportation cost increases are being passed through to other products.

The Political Tailwind

Kudlow, who served as director of the National Economic Council under Trump from 2018 to 2021, has remained a prominent voice for the administration's economic policies. His endorsement carries weight with pro-cyclical and small-cap investors who view Trump's deregulatory agenda and tax policies as supportive of domestic growth. The last time a senior Trump economic figure issued a similarly bullish public assessment was in early 2025, preceding a 12% rally in the Russell 2000 over the following three months.

The administration has also drawn support from corporate leaders. Dell Technologies CEO Michael Dell, whose net worth has surged $37 billion to $233 billion after the company's AI-server-driven stock rally, has been a high-profile backer of Trump Accounts for children. Apple shares have risen 14% year to date into record territory above $315, with investors eyeing new AI features expected at next week's Worldwide Developers Conference.

What's at Stake

The bullish narrative faces tests in the coming weeks. The May jobs report on Friday will show whether the labor market's stabilizing trend — three consecutive months of job gains for the first time since early 2025 — can hold. The Fed's next policy decision will be shaped by inflation data that the Beige Book suggests is under upward pressure from energy costs. Oil prices, while off their war-driven highs, remain elevated enough to feed through to consumer prices.

For equity markets, the question is whether the political endorsement translates into sustained buying. The Dow's record close this week came even as the tech-heavy Nasdaq slipped 0.1%, dragged by a 15% slump in Broadcom shares despite solid earnings. The rotation out of AI chipmakers into financial and healthcare names — UnitedHealth Group surged 5% on a Bank of America upgrade, Goldman Sachs added roughly 5% — suggests investors are broadening their exposure beyond the technology sector that has dominated this year's gains.

If the economy delivers the 80,000 jobs forecast for May and inflation data remains contained, Kudlow's "booming" characterization may find support in the data. If the Beige Book's inflation warnings prove prescient, the Fed could be forced to hold rates at their current 5.25%-5.50% level longer than markets have priced, testing the durability of the rally.

This article is for informational purposes only and does not constitute investment advice.