Data acquired by Finbold indicates that the $25.62 trillion market cap of the New York Stock Exchange (NYSE) is higher than the United States GDP of $21.67 trillion. The market cap is the latest available data as of February 2021, while the GDP data is as of April 2021.
The pandemic's role in the stock market cap surge is exhibited when comparing the NYSE's value between February 2020 and February 2021. Last year, NYSE's market capitalization was $15.54 trillion while the GDP was $21.84 trillion.
Pandemic, low-interest rate propel equity markets above U.S. GDP
NYSE's strong market cap is due to factors like the institutions hosting some of the biggest companies with huge corporate profits. For instance, the exchange is home to leading tech companies whose stocks spiked amide the pandemic.
The analysis highlights other reasons the U.S. equity market surpasses the country's GDP. According to the research report:
"Besides the pandemic, the Federal Reserve has steadily lowered interest rates over the years while injecting more currency into the economy. The move has helped propel the stock market to the point of surpassing the economy. Furthermore, with the pandemic raging, the government also instituted quantitative easing programs. The easing has helped the stock markets grow more than the economy."
Nasdaq-U.S., the second-largest exchange globally, has a market cap of $19.51 to rank below the U.S. GDP. Hong Kong Exchanges and Clearing has a market cap of $6.76 trillion, which is at least three times less than the U.S. GDP. The Shanghai Stock Exchange ranks fourth globally with a market cap of $6.55 trillion, followed by the Japan Exchange Group at $6.54 trillion.
Other exchanges whose market cap is trailing the United States GDP include Euronext ($5.07 trillion), Shenzhen Stock Exchange ($4.83 trillion), LSE Group ($3.83 trillion), TMX Group ($2.62 trillion), and National Stock Exchange of India ($2.55 trillion).