On Wednesday morning, Donald Trump took to his social media platform, Truth Social, to offer his financial advice just as stocks were fluctuating between gains and losses. His post read, “THIS IS A GREAT TIME TO BUY!!! DJT,” and it was timestamped at 9:37 a.m. Little did he know, his statement would soon coincide with a significant market shift.
Less than four hours after Trump's post, he announced a 90-day pause on nearly all tariffs. This announcement sent stocks soaring, with the market closing up 9.5% by the end of the trading day. The S&P 500 index regained approximately $4 trillion, which equates to 70% of the value it had lost over the previous four trading days. This turn of events showcased Trump's keen insight into market dynamics, though some critics deemed it too prescient.
Richard Painter, a former White House ethics lawyer and Trump critic, expressed concerns about the implications of such statements. He noted that securities law prohibits trading on insider information, suggesting that those who acted upon Trump's post may have profited significantly. “The people who bought when they saw that post made a lot of money,” he remarked.
The timing of Trump's post raises questions about whether he had already been contemplating the tariff pause when he made the announcement. When asked about the timing of his decision, Trump provided a somewhat ambiguous response. “I would say this morning,” he stated, adding that he had been thinking about the decision over the last few days. A White House spokesperson later defended Trump's post, emphasizing it was part of the President's responsibility to reassure the markets and the American public amidst media fearmongering.
Another intriguing aspect of Trump's post was his signoff with the initials “DJT,” which coincidentally is also the stock symbol for Trump Media and Technology Group, the parent company of Truth Social. This ambiguity left many wondering if Trump's advice was a general recommendation for stock purchases or a specific nudge toward investing in Trump Media. Despite inquiries, the White House did not clarify this point.
Regardless of the intent behind the message, investors eagerly responded, causing Trump Media's stock to close up 22.67%, outperforming the broader market. This remarkable increase came despite the company's reported losses of $400 million last year, illustrating a disconnect between the stock's performance and its financial realities. Trump's ownership stake in the company, now held in a trust managed by his eldest son, Donald Trump Jr., surged by $415 million due to the stock's rise.
Interestingly, Trump Media's performance was closely rivaled by another stock associated with the former administration—Elon Musk's Tesla. Following a news conference where Trump praised Tesla vehicles, the stock saw a significant surge, adding $20 billion to Musk's net worth. Kathleen Clark, a government ethics expert, highlighted that in previous administrations, Trump's post would likely have triggered an investigation. However, she speculated that the current climate may not lead to any substantial scrutiny, except perhaps an increase in viewership for Truth Social. “He’s sending the message that he can effectively and with impunity manipulate the market,” she commented, hinting at a potential trend of future stock tips from the former president.
As the situation unfolds, the implications of Trump's financial advice and its effects on the stock market continue to be a topic of interest and debate.
