US Stock Market's 'Best and Worst Days' Divided by Trump's Remarks

A MAGA (Make America Great Again) hat hung in the trading hall of the New York Stock Exchange (NYSE).

An analysis has emerged that remarks by U.S. President Donald Trump and his Truth Social posts are acting as key variables determining the volatility of the U.S. stock market.

Bloomberg reported on the 25th (local time), citing an analysis by market research firm Fundstrat Research, that the top five "best days" and "worst days" for the S&P 500 index since President Trump took office were all determined by his remarks or posts.

According to the analysis, there has been no instance since the Ronald Reagan administration in 1981 where a specific leader so frequently drove record market fluctuations.

Typically, economic indicators, Federal Reserve (Fed) interest rate decisions, and corporate earnings affect the market, but now it is pointed out that President Trump himself has become a key variable. As a result, Wall Street's focus on the President's 'mouth' has become clear.

The day the S&P 500 index rose the most during President Trump's current term was April 9 last year, when he temporarily suspended tariff imposition, surging by 9.5%. On May 12, when a US-China trade truce agreement was announced, it also rose by 3.3%.

Conversely, on April 3 last year, when President Trump first implemented comprehensive tariff measures, the index fell by 4.8%, and the following day, it dropped an additional 6% on news of China's retaliatory tariffs.

This trend was repeated during the Iran war phase.

Recently, the S&P 500 index recorded its sharpest 'V-shaped' drop and surge since 2020. On March 30, it fell 9% from its previous high, nearing a technical correction, but rebounded within just 11 trading days to hit an all-time high.

On March 20, when President Trump stated he did not want a truce with Iran, the S&P 500 index fell by 1.5%. On March 31, when he announced that 'negotiations with Iran are proceeding smoothly and the war is nearing an end,' the index surged by 2.9%, hitting its highest level since May and continuing its upward trend for the week.

This phenomenon is not limited to the stock market. Commodity prices also fluctuated significantly, and oil market volatility soared to early COVID-19 pandemic levels.

Alexander Altman of Barclays pointed out that President Trump's ambiguous stance on war made him both an "arsonist and a firefighter" of the market.

Hardika Singh, an economic strategist at Fundstrat, said, "He holds the market on a leash," adding that "it is unprecedented for a president to exert such control over the fate of the stock market."

New York Stock Exchange (NYSE)

However, there are counterarguments that such analysis is a statistical illusion.

Alexander Altman of Barclays explained that the average CBOE Volatility Index (VIX) during all presidential terms since 1990 was 19.3, which differs from the perception that the market under the Trump administration is more chaotic than before.

There is also an analysis that this is linked to the spread of 'passive investing'.

The analysis suggests that as passive funds, which simply track indices, have become mainstream in the market, the market as a whole has become more sensitive to news, whether it's presidential remarks or unexpected earnings.

It is well-known that President Trump regards stock prices as a kind of 'report card.' Accordingly, the Trump administration continues its aggressive public relations.

The official White House social media (SNS) channels upload graphics celebrating new S&P 500 index records, and President Trump sometimes directly advises investors to buy.