Donald Trump is well-known for his Twitter habit. He loves to post tweets about almost anything that is on his mind, including the stock market, and has spent the better part of his presidency using Twitter as his microphone. When it comes to the controversial 45th president, people love him or hate him.
One thing we know for certain, between his tweets, antics, and attitude, he causes controversy wherever he goes. The media loves to focus on the president, and Trump loves to denounce the media. However, it’s not just the media that has a field day with Trump. The stock markets are affected too.
The stock markets are already volatile, and Trump amplifies that. Even though he’s had some ups and downs, that isn’t stopping him from potentially running for re-election and winning a second term. If he does, the stock markets will continue to shake. And, until someone takes his Twitter account away, the markets will be stuck on this rollercoaster ride until at least 2020. Here are the main ways that Trump has affected the stock market.
The Post-Election Trump Bump
Trump benefited from the usual post-election bump. After an election win, the stock market surges. Back in November 2016, after Trump won, the stock market surged upwards. Even though Trump didn’t actually do anything, he still counted that as a win. He actually wasn’t even president at the time of the surge. But, he took credit for it anyway.
The post-election bump began to fade soon. Ironically, it actually started to sink right when the market realized he wasn’t going to stop tweeting when he became president. Perhaps the idea was that he would be able to control himself better after taking office. That was not what ended up happening.
Trump V. China
Trump picked fights with China all through the election. He claimed there was a major trade deficit (true) and that only he could fix it (not true). CNBC analyst Jeremy Siegel stated that the Trump-China trade war could sink markets by 20%. This was the worst-case scenario. But, it was something that could actually happen.
Asian markets took a hit after Trump threatened new tariffs. The DOW Jones also went down after more Chinese tariffs went into place. Trump, who also owns many businesses, makes most of his products in China. He takes advantage of the cheaper costs. He’s taking aim at China, even though he benefits from the Chinese economy.
Trump V. the Federal Reserve
Trump v. Fed
For a stretch in early fall 2018, the market was doing well. The Federal Reserve announced that they would be raising interest rates. The interest rate increase, while not pleasant, is necessary to prevent inflation. There was a $1.5 trillion tax cut recently passed, and inflation is on the horizon.
Between that and the spending, the Fed had to do something. And so, interest rates increased. Donald Trump didn’t like that. He was disappointed with his elected Fed chairman for raising rates. He was worried that higher rates would slow economic growth. So far, the Fed has ignored him. The Federal Reserve is independent and nonpartisan. Hopefully, it stays that way.
Facebook (NASDAQ:FB) (NASDAQ:FB), Trump, and the Russians
Facebook, Trump and Russia
Pretty much everyone has heard about Trump and his Russia ties. Investigations into the election uncovered Russian-backed propaganda flooding Facebook. The purpose of this propaganda-dump was to smear Hillary Clinton, Trump’s opponent.
Facebook founder Mark Zuckerberg caught (and is still catching) a lot of criticism for that. In addition, Trump is being investigated by an independent prosecutor for working with the Russian government to sway the election. The prosecutor has indicted thirty-two people for collusion. Four of these are Trump staff members.
The market didn’t really respond to the Russian investigation initially. But, when more and more Trump staffers agreed to turn on their boss, the market sank slightly. It was not a huge dip. But, as the investigation continues, the market might respond more dramatically.
Trump and the Economic Sanctions
Trump and Sanctions
Trump recently sanctioned Russia for using chemical warfare. Russia let out a nerve gas into the U.K. to silence a former spy. While it was surprising to see Trump turn on his on-again, off-again love interest Vladimir Putin, the sanctions were a strong moral stance. The Russian markets sank in response, with the ruble dropping in value quickly.
A second wave of sanctions will take place unless Russia proves they won’t use chemical weapons again. While the sanctions have hurt Russia, they are good for Trump domestically. People had previously criticized him for not being hard enough on Russia. Though that softness is understandable, as they did win him the election, he has put his foot down anyway.
President Trump’s Tariffs .. and more Tariffs
Trump and his tariffs
Out of everything on this list, tariffs have hurt the stock market the most. Trump, unhappy with trade deficits, has imposed tariffs on steel, oil, and other goods. The stock market generally responds poorly to tariffs. Tariffs are, after all, restrictions on trade. The stocks run on free trade. While some protectionism makes sense, taking it too far will cause problems. And not just internationally, either.
Recently, car producer Ford has been laying off people and closing plants. By 2020, the only cars Ford will have on the market are the Mustang and the Focus Active. The heightened costs of steel and aluminum are to blame for this. Good news: Ford’s stock did increase by three percent after it demolished most of its assets.
Trump and his Twitter Account
Trump's Twitter
The bane of the American existence is Donald Trump’s twitter account. Despite pleas to get Twitter to “accidentally” delete his account and lock him out, it hasn’t happened.
Every day is a new day with the president. His favorite thing to do is watch the news and live-tweet his reactions. He likes using capital letters. He likes punctuation. He does not like correct spelling. His tweeting causes short-term stock market dips.
For example, his recent attack on China’s “PR campaign” against him caused the stock market to sink. Leaking the decrease in unemployment caused another dip. If Trump stops tweeting, the stock market will probably skyrocket.
Trump V. Amazon (NASDAQ:AMZN) (NASDAQ:AMZN)
Trump V. Amazon
Donald Trump’s feud with Amazon owner Jeff Bezos has made headlines since spring. Trump claims that he’s upset with Bezos because Amazon uses USPS to make deliveries. He also accused Amazon of having “an uneven playing field.”
But, these reasons are likely covers for Trump’s real animosity towards Bezos. Jeff Bezos owns the Washington Post, an American publication. Though Bezos is just a funder and has no editorial capacity, Trump is convinced that Bezos has launched a smear campaign against him.
The Washington Post is often critical of the president. Trump has never responded well to criticism, mainly because he fires anyone who tries. His feud with Bezos has led to Amazon stocks dropping between five and seven percent.
Trump V. the Media
Trump V. the Media
Trump has never liked the media. They report everything he says and does, and, because he says and does a lot of controversial things, the media likes to call him out on it. Trump uses his famous “fake news” line constantly, both in tweets and in person. He has called the press the enemy of the people.
Recently, he kicked out Jim Acosta from the briefing room because Acosta asked him a question he didn’t like. While the stock market did sink slightly, it hasn’t fallen dramatically. The Federal Reserve increasing interest rates has helped with that. Politics and the market are often related. When an alarming presidential statement about the media surfaces, the market reacts.
Trump and the Gun Stocks Rise
Trump and Gun Stocks
In America, anyone can own a gun. There are thousands of deaths from shootings each year. Mass shootings occur every single week. Even though all other first-world countries have gun laws that prevent mass shootings, America does not. According to America, getting shot is a preferable alternative to not having something to shoot someone with.
Trump has not been devoted to the gun lobby, so gun stocks haven’t gone up constantly. But, he also hasn’t done anything to move legislation to prevent mass shootings. As a result, gun stocks skyrocket every time there is a mass shooting.
Recently, a shooting at a synagogue killed eleven people. Gun stocks rose as people bought more guns. Trump doing nothing about mass shootings is killing Americans and benefitting the gun companies.
Trump Tipping People off to the Jobs Report
NFP
The jobs report tip-off was another example of how social media can get the president into trouble. Trump tweeted recently that he was “looking forward” to seeing the new jobs report. This signaled good news for the market, and people began to sell.
He was not supposed to say anything until the report went out. Apparently, he couldn’t help himself and decided to tweet about it anyway. The stock market took a hit as people began to sell. A few hours after the tweet, the official jobs report was released. Had Trump waited a few more hours, the market most likely would have been fine.
Stormy Daniels, Trump, and Cohen
Stormy Daniels, Trump and Cohen
Michael Cohen was Donald Trump’s attorney for a long time. Recently, he came under investigation because there were rumors that Trump improperly used campaign funds to pay off a porn star named Stormy Daniels. Trump had an affair with Daniels while he was married to his third wife, indifferent First Lady Melania Trump.
Cohen dipped into campaign funds to pay Daniels $150,000 in hush money. This plan wasn’t as airtight as they thought, and Daniels broke the NDA. She gave everyone the details of the affair, telling the American people way more than they needed to know.
When questioned about this, Cohen admitted to it and agreed to turn on his former boss. The stock market didn’t react to Trump’s affair, but it did react to Cohen flipping on Trump. That could lead to impeachment, which caused some rumbles in the market.
Saudi Arabia Gets Away With Murder (Literally)
Trump and Saudi Arabia
Recently, Saudi Arabia murdered and chopped up a journalist named Jamal Khashoggi. Khashoggi, an American resident, was a dissident murdered by the government for his political views.
After the murder, Trump questioned whether it was necessary to risk oil prices just because Saudi Arabia killed an American. After realizing that that was the wrong response, Trump changed course and spoke out against the killing.
The US imposed sanctions, which caused oil stocks to drop. Recently, Trump signaled that the US would not go further in punishing Saudi Arabia. Trump also said the US supports the Saudis still.