Yes, Trump's Tweets Move The Stock Market. But Not For Long

2/17/2021 How Donald Trump’s Twitter Posts Affect the Stock Market | Barron's
MARKETS FEATURE
Yes, Trump’s Tweets Move the Stock

Market. But Not for Long.
By Evie Liu
Updated Sept. 9, 2019 12:51 pm ET / Original Sept. 9, 2019 5:00 am ET
Illustration by Robert Connolly
President Donald Trump’s frequent Twitter posts move the stock market—but not
for very long, according to an analysis of 14,000 of his tweets.
Investors probably remember the plunge in stocks in early August after Trump
announced—through a series of tweets—that he planned to place 10% tariffs on
$300 billion worth of imports from China, in addition to the $250 billion already
subject to levies. The S&P 500 fell 0.9% that Thursday and tumbled almost 3% the
next Monday as the Chinese yuan fell against the dollar and optimism over trade
gave way to pessimism.
https://www.barrons.com/articles/donald-trump-twitter-stock-market-51567803655 1/6
“Our representatives have just returned from China where they had constructive
talks having to do with a future Trade Deal,” Trump tweeted on Aug. 1. “We thought
we had a deal with China three months ago, but sadly, China decided to re-
negotiate the deal prior to signing.”
Such presidential tweets can drive the market, both up and down. But regardless of
the content, just the raw number and frequency of the Trump’s Twitter posts can
make a difference, too. Since 2016, days with more than 35 tweets by Trump have
coincided with negative returns for the S&P 500 on average, while stocks have
risen on days with fewer than five Trump tweets, according to Bank of America
Merrill Lynch. The gap in performance is statistically significant.
Twitter Happy
On some days, Trump has tweeted more than 80 times.
83 tweets on 84 tweets on
Oct. 19, 2016 May 1, 2019
100
80
60
40
20
0
2016 ’17 ’18 ’19
Note: Twitter data from 01/01/2016 to 08/31/2019
Source: trumptwitterarchive.com; Barron's
But how does the market perform a few days after a Trump tweet? Barron’s
conducted its own analysis of the market reaction to Trump’s tweets using data
from the Trump Twitter Archive, a website that collects all the tweets from Trump’s
account on a daily basis. We found patterns similar to the ones Bank of America
identified, and more. The more Trump tweets, the more the market drops.
From the beginning of 2016—when Trump was already a leading presidential

candidate but a year before he took office—until the end of August 2019, Trump
has sent out more than 14,000 tweets. That’s about 10 tweets per day on average,
and about 85% of those are original Twitter posts, not retweets. Trump rarely lets up
—he’s only gone 22 days without tweeting at all during that period—and has been
especially prolific this year. With four months to go in 2019, he’s already surpassed
his totals for the previous two years by a large margin.
Take May 1, 2019, a particularly busy day for @realDonaldTrump. Trump sent out
84 tweets from 6 a.m. to 11 p.m. that day—about one every 12 minutes. More
recently, he tweeted more than 60 times on Aug. 31, commenting on topics
ranging from the trade war and gasoline prices to Hurricane Dorian and Fox News’
ratings. The morning, from 7 a.m. to 10 a.m. is generally when Trump tweets the
most, with the three-hour stretch making up more than one-fourth of his total
number of posts.
Early Bird
The morning hours are Trump's favorite time to tweet.
10.0%
7.5
5.0
2.5
0.0
1 3 5 7 9 11 1 3 5 7 9 11
AM AM AM AM AM AM PM PM PM PM PM PM
Still, not every day is as busy as that. For about one-fifth of the 1,300 days we
studied, Trump tweeted fewer than five times, and the S&P 500 posted an average
positive return of 0.13% those days—or on the next trading day if the tweets came
during a weekend or holiday. That’s significantly higher than the average daily
return of 0.02% throughout the entire period.
After 10 trading sessions, however, the outperformance that follows Trump’s

quieter Twitter days is largely gone. The S&P 500 rose an average of 0.46% in the
10 trading sessions following Trump’s slower Twitter days, in line with an average
10-session return of 0.48% for the entire period.
On the flip side, for the roughly 7% of trading days when Trump tweeted more than
20 times, the S&P 500 posted an average daily loss of 0.03%. The market generally
recovered within 10 trading days, with an average gain of 0.21% over that time. But
that was still less than half the average 10-session return during the entire period.
More Tweets, Fewer Gains

On days Trump tweets more than 20 times, the S&P 500 drops an average of 0.03%.
-0.2% 0 0.2 0.4 0.6
<5 tweets per day
5-9 tweets per day

Average return after 1
day
10-14 tweets per day
Average return after
10 days
15-20 tweets per day
>20 tweets per day

The two biggest factors driving the market this year have been the trade war with
China and the Federal Reserve’s moves on interest rates. Those are also areas of
Trump’s preoccupation. There is clear evidence that when Trump tweets about
trade and the Fed, it’s usually not good for the market. The word “tariff” was
mentioned in 165 Trump tweets spread across 95 days. On those days, the S&P
500 declined an average of 0.12%. Trump has been a frequent critic of Fed Chair
Jerome Powell. The terms “Powell” or “Federal Reserve” or “the Fed” showed up in
100 tweets spread across 67 days, and the S&P 500 fell by an average of 0.05% on
those days.
Talking Business
The S&P 500 doesn't react well when Trump tweets about tariffs or the Federal Reserve.
-0.15% -0.1 -0.05 0 0.05
All tweets
Tweets about tariffs
Tweets about the Fed

The White House didn’t respond to a request for comment on how Trump’s tweets
move the market.
While there is clear correlation here, it doesn’t necessarily mean the Trump’s tweets
are single-handedly driving the market’s movement on a daily basis—
notwithstanding a few occasions when he made tariff-related announcements on
Twitter.
“Presidential tweets have become as common as pigeons in New York City and
corn in Nebraska,” Kristina Hooper, Invesco’s chief global market strategist, told
Barron’s in response to our findings. “They’re largely disregarded because market
has become very desensitized.”
Trump’s tweets should be put in the same category as economic data and other
daily news, Hooper suggested. In other words, investors should keep an eye on
them, but don’t get caught up in the short-term ups and downs that follow. Instead,
investors should focus on their long-term objectives and maintain a well-diversified
portfolio in sync with those goals.
After all, as our data suggest, most of the market volatility on days with
bombardments of Trump tweets will fade fast.

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2/17/2021 How Donald Trump’s Twitter Posts Affect the Stock Market | Barron's

Yes, Trump’s Tweets Move the Stock

Updated Sept. 9, 2019 12:51 pm ET / Original Sept. 9, 2019 5:00 am ET

Illustration by Robert Connolly

From the beginning of 2016—when Trump was already a leading presidential

After 10 trading sessions, however, the outperformance that follows Trump’s

More Tweets, Fewer Gains

<5 tweets per day

5-9 tweets per day

15-20 tweets per day

>20 tweets per day

Note: Twitter data from 01/01/2016 to 08/31/2019

Tweets about tariffs

Tweets about the Fed

Note: Twitter data from 01/01/2016 to 08/31/2019

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