Hours before officially announcing a pause on his planned tariff increases, former President Donald Trump posted a cryptic investment tip on his Truth Social platform. “STOCK MARKET READY TO CRASH. JOBS BEING LOST AT A RECORD PACE. BETTER BUY NOW!” he wrote Wednesday morning. By afternoon, U.S. stock markets surged after Trump confirmed he would delay his promised 25% tariffs on Mexico, Canada, and China.
This sequence of events has financial experts and ethics watchdogs questioning whether Trump engaged in market manipulation – a practice strictly regulated by federal law.
“What’s particularly concerning here is the timing,” says Robert Jenkins, former director at the Financial Markets Authority. “When someone with inside knowledge of policy decisions makes investment recommendations before those decisions become public, it raises serious legal questions.”
The S&P 500 jumped 1.2% Wednesday following Trump’s announcement, while the tech-heavy Nasdaq composite rose 1.5%. These movements represented billions in market value shifting hands in hours.
Trump’s decision to delay tariffs came after intense pressure from business leaders worried about economic disruption. The former president said he wants to give Mexico and Canada time to address border security and China to negotiate trade terms before implementing his promised tariffs.
According to the Securities and Exchange Commission, market manipulation occurs when someone artificially affects the supply or demand for a security. Section 9 of the Securities Exchange Act specifically prohibits transactions designed to create false impressions of market activity.
“Politicians have always influenced markets with their statements,” explains Maria Gonzalez, market analyst at Capital Research Group. “But there’s a difference between normal policy announcements and potentially using advance knowledge of your own decisions for financial gain or to help others profit.”
This isn’t Trump’s first brush with questions about market-moving communications. During his presidency, his tweets frequently sent stocks soaring or plunging, leading some trading firms to develop algorithms specifically tracking his social media activity.
What makes this case different is Trump’s direct encouragement to “BUY NOW” ahead of his own policy announcement. Several financial ethics experts I’ve spoken with note this crosses a line previous presidents have avoided.
“Presidents typically refrain from giving specific investment advice precisely because their words can move markets,” says Patricia Coleman, ethics professor at Georgetown University. “The SEC takes a dim view of anyone using non-public information to influence investment decisions.”
The Securities and Exchange Commission declined to comment on whether it’s investigating Trump’s social media post. Historically, the agency has been cautious about pursuing cases against political figures due to concerns about appearing partisan.
Legal experts suggest proving market manipulation would require demonstrating Trump’s intent to artificially influence prices, which presents significant challenges. However, the appearance of potential wrongdoing has renewed calls for stronger guardrails around presidential communications affecting financial markets.
Some Trump supporters dismiss these concerns, arguing the former president was simply expressing confidence in economic prospects under his leadership. “He’s been saying similar things throughout his campaign,” notes conservative commentator James Wilson. “This is being overblown by his critics.”
However, the specific timing and directive nature of Wednesday’s post distinguishes it from general campaign rhetoric.
Data from the Financial Industry Regulatory Authority shows trading volume spiked significantly in the hours between Trump’s “BUY NOW” post and his tariff announcement, suggesting many investors acted on his recommendation.
Several consumer protection groups have already filed complaints with the SEC requesting an investigation. “Whether or not this meets the legal threshold for manipulation, it demonstrates why we need clearer rules for public officials,” says Dana Marshall of the Consumer Financial Protection Coalition.
For everyday investors, this episode serves as a reminder of how quickly markets can move based on political statements – and the importance of making decisions based on personal financial goals rather than social media tips, even from prominent figures.
The episode also highlights the unprecedented challenges of having a businessman-turned-politician-turned-businessman potentially returning to the White
