For over a week, Wall Street has experienced significant fluctuations, largely driven by every statement made by President Trump regarding tariffs. Recently, he has been accused of leveraging his position to manipulate the markets, raising serious ethical questions about his actions. This scrutiny began with two notable posts on his social media platform, Truth Social.
On a Wednesday morning, shortly after the U.S. stock market opened, Trump made a bold declaration on Truth Social, urging investors with an all-caps message: “THIS IS A GREAT TIME TO BUY!!!” Just four hours later, he announced a pause on the most stringent tariffs affecting numerous countries. This significant news led to a rapid surge in stock prices, with the Dow Jones Industrial Average closing up nearly 3,000 points. Investors who heeded Trump's morning advice and entered the stock market stood to gain substantially by day’s end.
Prior to these posts, share prices had been in a downward spiral, fueled by escalating concerns regarding the economic repercussions of Trump’s trade policies. Prominent investors and business leaders had publicly expressed their anxieties about the new tariffs, contributing to a climate of financial panic. By the afternoon, it appeared that Trump had responded to these worries by pausing the tariff implementation.
The implications of Trump's posts have prompted Democratic lawmakers and ethics experts to demand investigations into potential wrongdoing. Senators Adam Schiff from California and Ruben Gallego from Arizona submitted a letter to the White House, calling for an urgent inquiry into whether Trump, his family, or members of his administration engaged in insider trading or other illicit financial activities, guided by prior knowledge of his tariff adjustments. Senator Elizabeth Warren from Massachusetts has also voiced her concerns, questioning whether this scenario represents “corruption in plain sight” during a recent congressional session.
Responding to these accusations, White House spokesperson Kush Desai suggested that Democrats are engaging in partisan tactics. In an email to NPR, he emphasized that Trump’s morning post was intended to alleviate investor fears, stating that it’s the President’s duty to reassure the markets and the American public regarding their economic stability.
The criticisms surrounding Trump's Truth Social posts extend beyond partisan lines. Richard Painter, a law professor at the University of Minnesota and former chief ethics lawyer for President George W. Bush, expressed concern over senior officials, including the President, discussing stock prices while simultaneously making impactful economic decisions. Painter recollected that if anyone in the Bush administration had made similar public statements urging stock transactions, they likely would have faced termination.
While Painter refrained from directly accusing Trump of market manipulation, he acknowledged that the President has a history of pushing ethical boundaries. Financial conflicts of interest associated with Trump have been a topic of concern since his election in 2016, and Painter noted that these issues have intensified. For instance, Trump’s favorable stance towards the crypto industry has drawn considerable attention, particularly given his personal investments in cryptocurrency-related ventures and the appointment of pro-crypto officials within his Cabinet.
Despite the mounting calls for investigation into Trump's Wednesday posts, many experts, including Painter, are skeptical about any significant outcomes. Republican lawmakers in control of both the House and Senate have shown little inclination to confront Trump. Furthermore, ethics specialists anticipate limited action from the U.S. Securities and Exchange Commission (SEC), which is responsible for investigating insider trading allegations. On the same day, the Senate confirmed Trump’s nominee Paul Atkins to lead the SEC, and Trump had previously signed an executive order in February granting him greater authority over independent regulatory bodies, including the SEC. An SEC spokesperson has refrained from commenting on the ongoing situation.
