THERE is always a fuss when the Dow reaches a nice, new, big, round number, as it did on Wednesday. The excitement is almost always overblown — the market is more than the Dow Jones Industrial Average, the economy is more than the market, etc — and this particular milestone comes with the potential for additional misinterpretation: Dow 20,000 does not necessarily amount to a vote of confidence in President Donald Trump’s ability to deliver economic growth.

The Dow has gained about 10% since Trump was elected, and for good reason: His proposed policies would augment the stream of cash flowing to investors. Reduced corporate tax rates, for example, would leave more money to pass on to shareholders, while cuts in capital-gains rates would allow them to keep more for themselves. 

The mere possibility of such a windfall offers investors ample motivation to bid up stocks.

More money for investors, though, does not automatically translate into more prosperity for everyone. Economic growth has been weak since the recession of 2007 to 2009, in part because of very low levels of capital investment. Companies would be more likely to increase this spending if Trump offered some specific enticements, or if they saw more demand for their goods and services.

On those fronts, the future is less clear. Stock investors tend to be relatively wealthy and hence less likely to spend each added dollar they make, so their gains probably will not do much for demand. Companies, for their part, are getting conflicting signals: Lower taxes would of course be attractive, but Trump’s public meddling in hiring and investment decisions might push in the other direction.

True, Trump’s plan to increase government spending on roads, bridges and other infrastructure could boost growth more broadly and even enhance productivity. Much will depend, though, on execution. Uncontrolled deficit spending could spook markets and leave the country deeper in debt without providing much long-term benefit. 

There is still a lot of confusion about what will happen: Measures of economic policy uncertainty are hovering around their highest levels since Britain’s vote to leave the European Union. 

Dow 20,000 is certainly a welcome milestone for investors. But it is not the measure American workers will use to judge whether the president has delivered on his promise to improve their lot. — Bloomberg