Trump Says Stock Market Tumble Is Due To Midterms, But Experts Say Its His Tariff Threats
President Donald Trump praised the stock market’s gains since his election on Monday but warned that the gains seen so far were in limbo as of this moment due to the uncertainty of the upcoming elections.
“The Stock Market is up massively since the Election, but is now taking a little pause – people want to see what happens with the Midterms,” Trump said, according to a tweet he wrote Monday morning.
He added that, in his opinion, a vote for a Democratic candidate would almost certainly lead to even lower stock numbers.
“If you want your Stocks to go down, I strongly suggest voting Democrat,” Trump said. “They like the Venezuela financial model, High Taxes & Open Borders!”
But experts and analyses from across the gamut suggested a different culprit behind lower stock market numbers in the past week: threats of a new Trump tariff against China.
The stock market had actually gained significantly on Monday, but as news spread about a potential trade penalty against Beijing to the tune of $257 billion, it swung the other way, according to reporting from Yahoo! News.
“Obviously, this trade skirmish is metastasizing potentially into something worse than it already is,” Mark Luschini, head of investment strategies at Janney Montgomery Scott, said.
Trump loved celebrating the stock market surge in 2017, but he's stayed silent amid market declines this year. https://t.co/KruhgqhshA
— CNBC (@CNBC) October 29, 2018
The markets did poorly last week, and haven’t done particularly well for the entirety of the current month. As of last Friday, the Dow Jones had dropped 6.7 percent over the month. The S&P dropped 8.8 percent, and Nasdaq was down 10.9 percent during that time as well, according to reports from CNBC. Investors expect stocks to rebound soon, mirroring what the start of Monday looked like, but the fragility of the marketplace is somewhat evident, given how fast they retracted after news of the tariffs came about.
Even as analysts saw European markets in recovery, some said that it was time to exercise caution rather than vigor when it came to investing at this moment.
“I don’t think we’re quite settled down yet,” Art Cashin of UBS said, according to reporting from MarketWatch.
With the midterms approaching, it’s possible that the president could continue to sell the markets as a sticking point for electing Republicans. Trump has a frequent habit of saying Democrats would be bad for the economy, as he said a year after his election win, according to the Daily Beast.
“If the Dems (Crooked Hillary) got elected, your stocks would be down 50% from values on Election Day,” he wrote at the time.
