Just as markets showed signs of optimism on Monday, a social media post by former U.S. President Donald Trump swiftly diverted attention, rattling investors and overshadowing what could have been a day of positive headlines.
The Dow Jones Industrial Average and S&P 500 opened higher amid easing inflation data and better-than-expected corporate earnings. But the early gains began to fade after Trump posted a fiery message on his social media platform, Truth Social, warning of “economic collapse” if the current administration remains in power.
The statement which included unverified claims about market manipulation and election fraud quickly trended online, drawing both political reactions and market unease.
Markets React to Political Noise
Traders say the post injected fresh uncertainty into what had been a relatively calm day for Wall Street.
“There was upward momentum this morning,” said Olivia Grant, a senior equity strategist at Mason & Rowe. “But the Trump post shifted focus back to political risk and that’s something markets are extremely sensitive to right now.”
While the major indexes still ended the day in the green, gains were notably trimmed by the closing bell. Technology and financial sectors, which had led early, pulled back as political noise overtook economic fundamentals in investor sentiment.
Trump Still Moves the Needle
Though out of office, Donald Trump remains a market-moving figure particularly as he ramps up his 2024 campaign rhetoric. Analysts note that his online statements frequently trigger shifts in everything from equities to currency markets, especially when they hint at instability or policy reversal.
“He’s not the president, but his words still carry weight,” said Daniel Kim, a political risk consultant. “Especially in a polarized environment where markets are watching for any signal of future disruption.”
Strong Fundamentals, Shaky Focus
Ironically, the day had opened with strong economic indicators. U.S. retail sales rose modestly, inflation cooled slightly year-on-year, and several major banks reported resilient quarterly earnings. Under normal conditions, these developments would have buoyed investor confidence.
But Trump’s message coupled with ongoing uncertainty around interest rates and geopolitical tensions proved a distraction markets couldn’t ignore.
“It’s frustrating,” Grant added. “We had real progress today, but one headline hijacked the narrative.”
Looking Ahead
As election season heats up in the U.S., analysts warn that political volatility will remain a key risk factor for markets. With candidates like Trump wielding powerful online platforms and loyal followings, social media has become a new frontier of market influence often unfiltered, and always fast-moving.
source: cnbc.com
Leave a Reply