The U.S. stock market is becoming ‘too big to fail’

The article argues that the U.S. stock market is becoming systemically important enough to warrant policy support during severe downturns. Citing Bloomberg Intelligence strategist Eric Balchunas and other market commentators, it notes that stock ownership has broadened sharply, equities now comprise a record share of household wealth, and the Buffett Indicator has reached an all-time high near 2.5x GDP. The piece suggests this creates a powerful wealth effect that supports consumer spending and economic growth, but also raises the odds that policymakers could intervene to prevent a prolonged bear market. It highlights the Fed’s expanded crisis toolkit since 2008, past interventions in credit markets, and examples of Japan and China facilitating stock purchases via ETFs. The article also links the issue to national security and AI competition, noting that the U.S. government has taken equity stakes in Intel and rare-earth firms and that officials could potentially backstop critical AI companies if markets wobble. Overall, the tone is that persistent equity weakness may be less tolerable for policymakers than in the past.