How Trump’s Election Win Could Shake Markets Again
Election results have fueled sharp gains, driving the dollar higher and sending Bitcoin and the S&P 500 to new all-time highs. This is exactly the kind of market-shaking action we anticipated just before the election day!
What to watch next
With Trump back in the office, traders will once again need to stay alert for sudden social media posts that could shake up the markets. His first term was filled with what traders called “Twitter bombs” – unpredictable posts that sent ripples across asset prices.
Analysts have long noted the market-shifting power of Trump’s tweets, drawing insights from his previous term:
- JPMorgan even created an index to track how his tweets affected bond yields.
- Bank of America Merrill Lynch found that days with frequent presidential tweets saw stock returns drop on average by 9 basis points, while days with fewer tweets averaged a positive 5 basis points.
- Citi observed that his tweets generally led to higher volatility in currency markets, with no signs of trader fatigue.
The takeaway? Traders should prepare for more volatility. This time, they’ll need to watch both X (formerly Twitter) and Truth Social, Trump’s primary platform, as his posts could spark major market movements.
Staying on top of these “Twitter bombs” can give you a strategic edge in fast-moving markets. In times like these, quick reactions and readiness to act are essential to catch trading opportunities.
