Donald Trump handed traders another ugly market moment on Monday, stoking the flames of classic insider trading rumors for him and all his friends.
Trump had posted on Truth Social that:- “I AM PLEASED TO REPORT THAT THE UNITED STATES OF AMERICA, AND THE COUNTRY OF IRAN, HAVE HAD, OVER THE LAST TWO DAYS, VERY GOOD AND PRODUCTIVE CONVERSATIONS REGARDING A COMPLETE AND TOTAL RESOLUTION OF OUR HOSTILITIES IN THE MIDDLE EAST.”
Not even an hour later, Iran’s state-backed media mockingly denied everything Trump said, promising that no talks have happened and absolutely no ceasefire is on any table.
Though the news covered the alleged lies Trump told about a ceasefire with Iran, what many might have missed was that before Trump announced those talks, insiders rapidly opened up long positions in stocks and then short positions on oil.
At about 6:50 a.m. in Washington DC, S&P 500 e-Mini futures on the CME suddenly saw a sharp burst in volume. Premarket trading had been calm, so the jump stuck out right away.
Around that same time, West Texas Intermediate May futures also saw a clear rise in trading activity. Oil had been quiet too, then volume popped there as well.
About 15 minutes after the positions were opened, Trump posted on Truth Social that the U.S. and Iran had talks and that planned attacks were being halted. Right after that, S&P 500 futures climbed more than 2.5% before the bell, while WTI futures fell almost 6%.
Early trades put stocks up and oil down before Trump spoke
That sequence caught traders’ attention because there was no obvious public reason for those trades at 6:50 a.m. Futures markets are usually thinner early in the morning, so sudden buying or selling can look bigger than it would later in the day.
Even so, this was hard to ignore. Whoever bought a big chunk of stock futures and sold or shorted crude futures just before Trump’s post would have made a lot of money within minutes.
This pattern has become fully developed and equally as mortifying for the most powerful country in the world.
Back on April 2, during Trump’s so-called Liberation Day tariff event, the press conference was scheduled for 4 p.m. Eastern time. But after speaking for a while, Trump gave the real tariff details only after markets had already closed at 4:30 p.m.
He then said those tariffs would begin shortly after midnight on Saturday, April 5, when markets would also be closed. That meant traders had to sit with the news instead of reacting in real time during normal market hours.
A week later, after a brutal stretch for stocks, Trump posted minutes after the market opened at 9:30 a.m. Eastern Time, “BE COOL! Everything is going to work out well,” and “THIS IS A GREAT TIME TO BUY!!”
The next day, after markets had dropped to their lowest point of the year, he announced a 90-day pause on nearly all tariffs above 10%. Stocks then posted their best single day since 2008.
Trump has continued to drop major policy news when markets were most exposed
The same habit showed up again later in the year on Friday, October 10, Trump announced 130% tariffs on China 20 minutes after markets closed for the weekend. Those tariffs were set to begin on Saturday, November 1, when markets were closed again.
Then on January 21, 20 minutes before markets opened, Trump said during an overseas trip that he would not try to take Greenland using “excessive strength and force,” and it came right after stocks had their worst day since October, while the dollar had its worst day since August.
After Trump announced broad levies in April, the S&P 500 fell 12%, then later, after he backed away from some of those policies through social media, the index rallied 37% through the end of the year.
As you most likely know, this embarrassing habit gave traders a nickname for the setup: the TACO trade, short for ‘Trump Always Chickens Out.’
Source: https://www.cryptopolitan.com/how-trump-manipulated-markets-yesterday/
