President Donald Trump has some advice for investors: they’re making a “big mistake” by selling off stocks amid good economic news.
Trump, who has repeatedly praised Wall Street gains during his first year in office, dismissed recent market gyrations.
“In the ‘old days,’ when good news was reported, the Stock Market would go up. Today, when good news is reported, the Stock Market goes down,” Trump said on Twitter.
“Big mistake, and we have so much good (great) news about the economy!”
The U.S. stock market remained fragile Wednesday, with shares fluctuating and volatility measures double levels from last week as investors come to grips with strong economic growth that may accelerate the removal of monetary stimulus.
The Dow Jones Industrial Average and S&P 500 Index both rose Wednesday after opening slightly lower, following the previous session’s late surge.
A wild session on Tuesday had seen the Dow swing more than 1,100 points from peak to trough and ended with the benchmark S&P 500 recording its best day since just before President Donald Trump’s election in 2016.
Traders are still braced for more volatility as they try to figure out if the swings of the past week are the start of a deeper correction or just a temporary blip in the U.S. market’s nine-year bull run.
“It looks like a little bit of a stabilization trade overnight,” said John Brady, senior vice president at futures brokerage R.J. O‘Brien & Associates in Chicago. “I don’t know if it’s over, but a market range may be established.”The tweet marked the first time Trump has directly weighed in on the market's recent turmoil.
Trump has tweeted about the stock market at least 60 times since his election in November 2016, CNBC reported. noting that Trump has mentioned stock market success much more frequently than his predecessors.
Meanwhile, the sudden cratering of stock prices, rising bond rates and fierce volatility have been a stark reminder that Trump, like his predecessors, isn't commander in chief of the U.S. economy, the Associated Press explained.
Financial markets pivot on forces that owe at least as much to computerized trading programs, overseas investors and global central banks as they do to a president's policies and force of personality.
The same investors that cheered Trump's tax cuts and stayed calm amid the threat of a nuclear attack from North Korea are now dreading the risk of higher inflation and the prospect of rising interest rates engineered by the Federal Reserve and other central banks.
Yet beginning immediately after his 2016 election all the way through last week's State of the Union address, the president repeatedly claimed credit for a surging stock market and increases in Americans' retirement saving accounts. On Twitter, he declared that stocks would rise even higher once his $1.5 trillion tax cut was "totally understood and appreciated."
Investors and the trillions of dollars they control, it turns out, have minds of their own, as shown by the stock market's dizzyingly steep declines on Friday and Monday and the volatility that extended into Tuesday.
"This is a healthy reminder that there are risks in the market," said Mark Doms, a senior economist at Nomura Securities. "If you invest in the stock market, there are ups and downs. We just hadn't had too many downs recently."
(Newsmax wire services Bloomberg and Reuters contributed to this report).
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