But the White House says it’s simply reassuring markets
At 9.37am on Wednesday, shortly after the opening of the New York Stock Exchange, Donald Trump posted a message on Truth Social: “THIS IS A GREAT TIME TO BUY!!!” he wrote, followed by his initials (DJT) and the ticker ID for his listed company, Trump Media & Technology Group.
At 1.18pm he announced a 90-day pause on tariffs and sent the stock market soaring. Trump Media had its strongest day this year.
So what? Democrats are calling for formal investigations into “market manipulation” and “insider trading”. The White House responded that Trump’s comments were intended to “reassure markets and Americans”. In the mess only this is certain: the rise and fall of global stock markets has never been so dependent on the all-caps pronouncements of one man.
What we know. Minutes before Trump’s post, the volume of calls to buy options on the Nasdaq and two other exchanges spiked dramatically. The world’s richest 500 people saw their combined on-paper wealth rise by $304 billion in a day – the largest jump ever recorded on the Bloomberg Billionaires Index. Here’s the top five:
- Elon Musk: up $35 billion on 9 April vs year-to-date losses of $107 billion.
- Jeff Bezos: up $18.5 billion vs YTD losses of $28.7 billion.
- Mark Zuckerberg: up $25.8 billion vs YTD losses of $723 million.
- Warren Buffett: up $8.1 billion vs YTD gains of $20 billion.
- Larry Ellison: up $15.5 billion vs YTD losses of $32 billion.
WTF? There’s nothing to suggest these people, or anyone except Trump, knew what was coming and bet on it. Even some of Trump’s own team appear to have been caught off-guard.
In a clip that has since gone viral, Democratic Rep. Steven Horsford questioned Trump’s trade representative Jamieson Greer over why he lacked any knowledge of the president's tariff pause: “WTF! Who’s in charge?” Horsford asked. “Because it sure doesn’t look like it’s the trade representative. You just got the rug pulled out from under you.”
What does the law say? “His post on truth social itself alone is probably not a violation of the law, but the question is whether it’s part of a pattern that would be designed to manipulate markets,” says Richard Painter, chief White House ethics lawyer under George W Bush.
“If he knows what the administration’s tariff policy is going to be and he trades on that, that would be a criminal offence. If he tips off a family member, that would be a criminal offence… I'm not making that accusation against the president, but that would be a serious concern.”
Trading is a “personal capacity act” meaning that the previous finding of immunity in Trump v United States would not apply if he faced charges under US securities law.
Wool over the eyes. Market euphoria has been short-lived, with the S&P 500 down 3.5 per cent at yesterday’s close. Trump’s pause hasn’t actually provided much relief. According to the Budget Lab at Yale
- a 10 per cent broad tariff on every country; plus
- a higher 125 per cent tariff on China; is equivalent to
- a 25 per cent increase in the overall effective tariff rate.
Whatever the reason for Trump’s rollback, it has failed to diffuse the bomb he’s dropped on the global economy. Volatility is higher than ever, and there are fears that swings in the markets are being exacerbated by AI-based trading strategies which encourage “herding and market concentration”.
What’s more... A date for the diary: 15 May is the next deadline for US lawmakers to disclose their public stock holdings. Expect to find out more about who’s been winning and losing then. Nancy Pelosi’s title for Congress’s best stock-picker may have some challengers.
