Charted: The Trump bump
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A well-timed, optimistic post on Truth Social from President Trump about the war in Iran can send stocks higher.
Why it matters: Social media posts from the White House have become key drivers of the oil and stock markets during the conflict, particularly as its resolution seems to keep moving further and further out of reach.
Case in point: It happened again Tuesday as stocks slumped over worries that the U.S. and Iran would not negotiate a resolution.
- After the market close, Trump posted that he would extend the ceasefire until Iran can come up with "a unified proposal" and "discussions are concluded, one way or the other."
- U.S. stock futures were up Wednesday morning, pointing to a positive open.
- Oil prices were not as responsive — Brent crude futures are sitting at around $99 per barrel, higher from optimistic levels last Friday.
Zoom in: Here are two occasions over the past month when Trump posts appeared to drive stocks sharply higher:
- On March 23, some two hours before the U.S. market opened, Trump posted that the U.S. and Iran had "very good and productive conversations regarding a complete and total resolution of our hostilities..."
- On April 17 stock prices were falling, but minutes before the market open Trump posted: "The Strait of Hormuz is completely open and ready for business and full passage, but the naval blockade will remain in full force and effect.."
Reality check: That missive also came on the heels of a similarly optimistic post on the Iranian side.
- And social media posts have long driven markets up or down — recently a provocative AI doomer blog post pulled down stocks.
- Still, the U.S. president's words carry more weight.
The intrigue: The oil market in particular has been extremely volatile throughout the war, trading sharply lower or higher depending on messaging from the administration.
- Citadel's head of commodities, Sebastian Barrack, told the Financial Times that traders have struggled to adjust to the volatility driven by Trump's social media posts during the war.
- He said he has a screen solely to monitor the president's social media posts.
Between the lines: The post effect is so widely known on Wall Street that it had Goldman Sachs CEO David Solomon making a joking reference to it Tuesday morning in an interview with CBS' Kelly O'Grady, according to a transcript of the event.
- After talking about the relatively low odds of a recession in the U.S. now, Solomon quipped, "It's only one tweet away."
- "I believe it's called a post now," O'Grady responded.
- "It's a post, excuse me. Sorry about that. I'm showing my age."
