On Wednesday, just under four hours before President Donald Trump made a significant announcement regarding tariffs, he engaged with his 9.4 million followers on his social media platform, Truth Social. He tweeted at precisely 9:37 a.m. Eastern Time, declaring, “THIS IS A GREAT TIME TO BUY!!! DJT.” This timely message preceded his official announcement at 1 p.m. that he would pause most new tariffs, which ultimately led to a sharp rise in the struggling stock markets.
In the wake of Trump’s statements, Democratic lawmakers have accused him of “market manipulation.” The term has quickly gained traction on the social media platform X, with over 33,000 posts discussing the implications. The House Committee on Financial Services stated on X, “The President of the United States is literally engaging in the world’s biggest market manipulation scheme.” This accusation raises important questions about the ethics of a sitting president influencing the stock market.
Throughout his presidency, Trump has faced scrutiny regarding his various business holdings. Notably, after his election, he made no commitments to divest from his financial interests. According to the White House, Trump’s assets are placed in a trust managed by his children. A significant portion of his net worth is tied to his investment in Truth Social’s parent company, Trump Media & Technology Group, which trades under the ticker symbol DJT—his initials and the sign-off from his Wednesday morning post.
Following the announcement of the tariff pause, Trump Media & Technology Group experienced a significant stock rally, closing the day with an increase of more than 21%. In defense of the president, White House spokesman Kush Desai stated, “It is the responsibility of the President of the United States to reassure the markets and Americans about their economic security in the face of nonstop media fearmongering.” This defense highlights the delicate balance between leadership and market influence.
Democratic Representative Steven Horsford of Nevada expressed concerns that Trump’s post raised suspicions about potential insider trading within the administration regarding tariff information. “It’s my concern that the administration may be using trade policy to give insider information to individuals before impending actions or inactions,” he remarked. Horsford has called for a comprehensive investigation into who may have profited from such information, although he acknowledged that ongoing issues with oversight due to the firing of inspectors general complicate matters.
Typically, allegations of market manipulation are first examined by stock exchanges like Nasdaq and the New York Stock Exchange, which investigate trading anomalies. If they discover unusual trading patterns, they report the findings to the Securities and Exchange Commission (SEC). However, in this instance, it remains unclear who the SEC could target for a potential case, as it is difficult to identify private individuals who may have benefited from Trump’s social media post.
As the key decision-maker regarding tariff policies, Trump had access to information deemed “material” to stock values when he encouraged buying. However, due to the general nature of his statement, building a case for a disclosure violation would be challenging. James Angel, a finance professor at Georgetown University, stated, “Our securities laws outlaw any kind of fraud or manipulation, but it’s often hard to prove manipulation.” He expressed doubt that regulators would pursue someone simply for suggesting it was a good time to invest.
Legal experts, including former chief ethics lawyer Richard Painter, caution that Trump’s posts could invite scrutiny and potential legal repercussions for market manipulation or insider trading. Painter emphasized that Trump is “playing with fire” by making explicit references to market activity on social media. He also noted that such conduct may not qualify as “official acts” related to his presidential duties.
After several days of declining stock values, major indexes experienced a significant recovery. The S&P 500 surged by 9.5%, while the Dow Jones Industrial Average rose nearly 8%. Financial experts predict that Trump’s social media activities could lead to hedge funds adjusting their trading strategies, with many likely to monitor Truth Social for future market cues. As the situation unfolds, the intersections of politics, ethics, and finance continue to be scrutinized.
