Inside the 'troubling' pattern in Trump’s stock market rallies and slumps

Source: Alternet.org · Bias: Left

Summary

According to financial columnist Matthew Lynn, something unusual has been happening with the stock market during President Donald Trump’s second term. “A Rose Garden announcement triggers panic on Wall Street,” writes Lynn in the Washington Post, “then a post on Truth Social sends stock prices soaring. A promise of upcoming news launches a market rally, which slumps when the actual news is delivered that evening.” This pattern of presidential proclamations having such a direct impact on the stock market has never been seen before, “and that’s troubling.”Lynn has numbers to back up the assertion of Trump’s pronounced effect on trading. As he explains, “According to a recent report from the financial research firm Fundstrat, Trump was the driver of the five best trading days on the S&P 500 index since the start of his second term. And he was also responsible for its five worst trading days. Such as? On April 3, 2025, the S&P 500 fell 4.8 percent when Trump announced ‘Liberation Day’ tariffs, and it bounced back 9.5 percent when most were suspended six days later.”Whether leveraging trade war, military strikes, or ceasefires, Trump is “the dominant force on Wall Street. What he says can create or destroy billions of dollars of wealth in an instant.” What’s more, the Fundstrat study found that no other president over the past 45 years has had such a pronounced ability to manipulate the market. “None of the five best or worst trading days under Joe Biden were driven by one of his announcements,” notes Lynn. “During Bill Clinton’s eight years in office, only one of the five worst days could be pinned on the president or his administration, and none of the best. Sentiment on the stock market was routinely driven by interest rate announcements, corporate earnings or economic data. Not by the guy in the White House.”Lynn asserts that it isn’t healthy for Trump to have such an oversized finger on the scales for two key reasons. First, “Trump is wildly inconsistent,” and his impact on stocks results in wide swings that may benefit a few high-frequency traders but hurt the majority. At the same time, “nothing that Trump says or does makes much difference to the actual business of making and selling things… The market keeps getting worked up over very little.”Consequently, the economic security of the 62 percent of Americans who have finances linked to the stock market is threatened. On top of that, writes Lynn, “Companies use the market to raise the capital they need to invest, and investors are the main force keeping corporate leaders focused and disciplined. The market should be driven by such factors as the amount of money that companies can make, how fast they can develop new technologies, whether they can expand into new markets, and whether they can become more efficient at making and selling stuff… When values are driven instead by the increasingly bizarre statements of a single individual, so much noise is created that no one can hear the signals.” In other words, Trump's impact on stocks both hurts the wallets of individual Americans and causes chaos for businesses. With this in mind, Lynn suggests that a new acronym should be created to apply to Trump along with those that have already caught on, like TACO and NACHO.“How about MUTE,” he offers, “for ‘mindfully unsubscribing from Trump entirely’? Or even, since the existing tropes seem to have been cribbed from the menu at a Mexican restaurant, TEQUILA, for ‘tuning out every quip, utterance, incident, line and announcement’? That would be a lot better for everyone’s portfolio, for investment in American industry — and for everyone’s mental health.”

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Inside the 'troubling' pattern in Trump’s stock market rallies and slumps
Alternet.org

Inside the 'troubling' pattern in Trump’s stock market rallies and slumps

Left

According to financial columnist Matthew Lynn, something unusual has been happening with the stock market during President Donald Trump’s second term. “A Rose Garden announcement triggers panic on Wall Street,” writes Lynn in the Washington Post, “then a post on Truth Social sends stock prices soaring. A promise of upcoming news launches a market rally, which slumps when the actual news is delivered that evening.” This pattern of presidential proclamations having such a direct impact on the stock market has never been seen before, “and that’s troubling.”Lynn has numbers to back up the assertion of Trump’s pronounced effect on trading. As he explains, “According to a recent report from the financial research firm Fundstrat, Trump was the driver of the five best trading days on the S&P 500 index since the start of his second term. And he was also responsible for its five worst trading days. Such as? On April 3, 2025, the S&P 500 fell 4.8 percent when Trump announced ‘Liberation Day’ tariffs, and it bounced back 9.5 percent when most were suspended six days later.”Whether leveraging trade war, military strikes, or ceasefires, Trump is “the dominant force on Wall Street. What he says can create or destroy billions of dollars of wealth in an instant.” What’s more, the Fundstrat study found that no other president over the past 45 years has had such a pronounced ability to manipulate the market. “None of the five best or worst trading days under Joe Biden were driven by one of his announcements,” notes Lynn. “During Bill Clinton’s eight years in office, only one of the five worst days could be pinned on the president or his administration, and none of the best. Sentiment on the stock market was routinely driven by interest rate announcements, corporate earnings or economic data. Not by the guy in the White House.”Lynn asserts that it isn’t healthy for Trump to have such an oversized finger on the scales for two key reasons. First, “Trump is wildly inconsistent,” and his impact on stocks results in wide swings that may benefit a few high-frequency traders but hurt the majority. At the same time, “nothing that Trump says or does makes much difference to the actual business of making and selling things… The market keeps getting worked up over very little.”Consequently, the economic security of the 62 percent of Americans who have finances linked to the stock market is threatened. On top of that, writes Lynn, “Companies use the market to raise the capital they need to invest, and investors are the main force keeping corporate leaders focused and disciplined. The market should be driven by such factors as the amount of money that companies can make, how fast they can develop new technologies, whether they can expand into new markets, and whether they can become more efficient at making and selling stuff… When values are driven instead by the increasingly bizarre statements of a single individual, so much noise is created that no one can hear the signals.” In other words, Trump's impact on stocks both hurts the wallets of individual Americans and causes chaos for businesses. With this in mind, Lynn suggests that a new acronym should be created to apply to Trump along with those that have already caught on, like TACO and NACHO.“How about MUTE,” he offers, “for ‘mindfully unsubscribing from Trump entirely’? Or even, since the existing tropes seem to have been cribbed from the menu at a Mexican restaurant, TEQUILA, for ‘tuning out every quip, utterance, incident, line and announcement’? That would be a lot better for everyone’s portfolio, for investment in American industry — and for everyone’s mental health.”

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