Source: Wall Street See News Author: Huang Yu

Is Trump going to influence the US stocks again with his personal influence?

After Trump made comments on Wednesday, European and American chip stocks plummeted.

First, the stock price of lithography giant ASML Holding dropped by 10% in Europe, and then Nvidia in the United States also fell by 6%, and AMD fell by 10%. The collapse of chip stocks also dragged the Nasdaq index down 2.7%, the largest single-day decline since December 2022. Only the stock prices of Intel and GlobalFoundries rose against the trend.

Trump's ability to "manipulate" the US stocks is so dominant, and this is not the first time he has influenced the stock market through his remarks.

When Trump was president, he loved to use Twitter to manipulate the stock market.

Trump is probably the president of the United States who loves to use Twitter the most in history.

During Trump's presidency, he often used his remarks in public occasions to praise or criticize certain industries or companies, especially using Twitter to express his opinions and cause market fluctuations.

On February 19, 2020, when the US stock market hit a historic high and Trump's approval rating also rose, he tweeted to celebrate the achievement.

"The stock market hit a new high again!"

After this tweet, the epidemic came, then panic hit the US stock market, the US stock market plummeted, leaving embarrassed Trump.

Usually, American presidents and politicians do not publicly express their concerns about individual companies, because this will cause major market volatility.

Like in 1962, because of concerns about rising inflation, the then US President John F. Kennedy publicly criticized the pricing plan of steel company executives, and mentioned the United States Steel Corporation specifically at a news conference. This event subsequently triggered a threat of anti-monopoly investigation into the steel industry, which scared investors and triggered a sharp decline in the stock market. Therefore, in the following decades, Reagan and Clinton who took office afterwards avoided directly commenting on companies or markets.

But Trump did not follow this pattern. Almost from the moment he was elected president, he began his "Twitter governing" and used the performance of the US stocks as a barometer of his own political achievements. Since taking office in 2017, he has sent more than 200 tweets or retweets about the US stock market, and released a large number of statements highlighting the rise of the stock market during his tenure.

Interestingly, whenever the stock market falls, Trump will always attribute the decline to his subjective political opponents, such as the Federal Reserve, the Democratic Party, and many news media. He publicly threatened and criticized major American companies, including Amazon, the US Postal Service, General Motors, Ford, Lockheed Martin, and Boeing, among others.

Trump even demands that the Federal Reserve cut interest rates to save the market when the stock market falls. Dan Wood, a political science professor at Texas A&M University, said: "I don’t think any president, and probably no future president, will be as concerned about the stock market as Trump."

Trump's tweets and Wall Street's worries

Trump's opinions on the stock market that he posted on Twitter often make fund managers, bankers, analysts, investment advisers, and other professionals on Wall Street very worried, as they need to pay close attention to Trump's information on Twitter and respond to sudden market fluctuations.

Kristina Hooper, Chief Global Market Strategist of Invesco, said: "The Trump administration has much more information to pay attention to, and we have never tried to get so much information from the president before."

Although Trump’s tweets often make Wall Street distressed, overall, the US stock market performed well during his four-year tenure. From the election day of 2016 to November 3, 2020, the cumulative increase of the S&P 500 stock index exceeded 70%.

Jason Trennert, chief investment strategist at Strategas Research Partners, pointed out that during this period, the key to the rise of the US stock market was the significant reduction tax policies during Trump's tenure, which to some extent offset the negative effects of his free and uninhibited policy making and propaganda methods.

With Trump currently leading the presidential election, will we see another scene of "Twitter ruling the country" like we did before?

Editor/Lambor