'Trump Accounts' launch signals up to $20B flowing into US stocks

The US government has officially launched "Trump Accounts," a program that seeds investment funds for newborns, fueling expectations of a fresh wave of long-term capital into American equity markets. Analysts project that government contributions combined with corporate donations could channel at least $20 billion into US stocks in the second half of this year alone.

According to CNN, CNBC and the US Treasury Department, the program began operating July 4. President Donald Trump declared the launch at a joint opening bell ceremony held at the White House with the New York Stock Exchange and Nasdaq, saying it would be "a truly incredible benefit for children."

Trump Accounts are long-term investment accounts for American children under 18. Newborns who are US citizens born between Jan. 1, 2025, and Dec. 31, 2028, are eligible to receive a one-time government deposit of $1,000 per account. Once a parent or legal guardian opens an account, the government transfers the initial investment.

About 6 million children have opened Trump Accounts so far, according to the Treasury Department. Of those, about 1.4 million are newborns eligible for the government grant, while the rest opened accounts through voluntary parental contributions or private donations.

A defining feature of the program is that all invested funds flow directly into US equity markets.

Account holders cannot buy or sell individual stocks. Instead, the accounts are designed to invest exclusively in mutual funds and exchange-traded funds that track major US indexes, including the S&P 500 and the Nasdaq 100.

The Treasury Department has designated State Street's SPDR Portfolio S&P 500 ETF (SPYM) as the default investment product, with plans to expand the range of eligible ETFs. Management fees are capped at 0.1 percent of assets annually, meaning a $1,000 investment would incur a maximum fee of about $1 per year.

Parents can manage their children's accounts through a dedicated app and website co-developed by Robinhood and Bank of New York Mellon.

Wall Street views Trump Accounts as a new source of sustained buying support for US equities.

Wells Fargo estimated that roughly $19.5 billion would flow into markets through Trump Accounts in the second half of this year alone.

"The $20 billion figure represents only about 3 percent of the amount contributed annually to 401(k) retirement plans, but most of it is expected to concentrate in the third quarter, which will amplify its market impact," said Kwon Oh-sung, a senior equity strategist at Wells Fargo.

Analysts also note that unlike traditional retirement funds, which spread investments across bonds and foreign assets, Trump Accounts are restricted to US equity ETFs — an arrangement expected to deliver a relatively larger boost to demand for large-cap technology stocks in particular.

Corporate participation is also building.

Dell Technologies Chairman Michael Dell and his wife Susan Dell announced they would contribute $250 per account for about 25 million children under age 10 who were born before Jan. 1, 2025, and are therefore ineligible for the government grant.

SpaceX President Gwynne Shotwell also unveiled plans to donate one share of SpaceX stock through Trump Accounts to more than 2 million children.

Goldman Sachs, Morgan Stanley, JPMorgan Chase, BlackRock, Comcast, Micron and Intel are among the companies planning to match the government's $1,000 contribution for the children of their own employees.

Some market observers say Trump Accounts could evolve beyond a short-term market stimulus into a structural program for cultivating long-term retail investors in the United States. Because the accounts invest in major US indexes from birth, analysts say the program has the potential to consistently channel stable, long-term capital into American equity markets for decades to come.