Investment accounts for the next generation will help power the stock market.
“I think [Trump Accounts] are positive. About 35% of the S&P 500 index is tech names. So basically you’re talking about now a permanent bid of buyers being layered on into the S&P 500 and into, therefore, tech. So I think it’s good for markets. I think it’s good for retail [investors],” said EMJ Capital founder Eric Jackson on Yahoo Finance’s Opening Bid.
President Trump hosted the heads of the New York Stock Exchange and Nasdaq, as well as Dell (DELL) founder Michael Dell, in the Oval Office today to mark the launch of the children’s investment accounts. Dubbed Trump Accounts, they went live on July 4.
Trump rang the opening bells for each exchange directly from the White House — a symbolic moment meant to signal that the stock market is open for everyone’s long-term wealth-building.
He said during remarks at the Oval Office that Trump Accounts are “absolutely incredible for children.”
Trump Accounts are custodial-style traditional IRAs for children under 18, owned by the child but administered by a parent or guardian. Investments are limited to low-cost index funds and ETFs tracking broad US equity indexes, such as the S&P 500. There are no withdrawals permitted before age 18.
Read more: Trump Accounts explained: How they work, who qualifies
US citizens born between 2025 and 2028 are eligible for a $1,000 seed contribution directly from the US Treasury.
McKinsey estimates in a new study that Trump accounts could generate between $80 billion and more than $900 billion in long-term asset accumulation for lower-wealth households over the next decade.
“But from the flat thousand-dollar-a-baby perspective, it’s actually benefiting the lower income more than the upper income,” added Jackson, who compared it to COVID-era stimulus payments.
“And we saw obviously what effect [the stimulus checks] had in terms of just both an increase … directly into the veins of the economy. But also, obviously, we all remember the direct impact it had on the stock market too.”
Brian Sozzi is Yahoo Finance’s Executive Editor, host of the ‘Power Players With Brian Sozzi’ podcast and a member of Yahoo Finance’s editorial leadership team. Follow Sozzi on X @BrianSozzi, Instagram, and LinkedIn. Tips on stories? Email brian.sozzi@yahoofinance.com.
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