Former President Donald Trump has often used the stock market as a gauge of his success, frequently highlighting record highs achieved during his administration and continuing to boast about the “beautiful” performance of the market under his watch.
However, a closer examination reveals that while Trump may have a notable influence on specific market segments, his impact is frequently detrimental, especially for companies and industries he criticizes.
Trump’s Market Influence
Trump’s influence on stock prices is well-documented, though often overstated. While individual stock movements are rarely driven by a single factor, Trump’s outspoken criticisms and policy threats have been known to precipitate significant market disruptions.
A notable example occurred following Trump’s criticism of Taiwan’s semiconductor industry—a key player responsible for approximately 90% of global production—and his questioning of U.S. military support for Taiwan. This criticism led to a sharp decline in the stock of Taiwan Semiconductor Manufacturing Company (TSMC), which dropped around 15%, and a 10% fall in the broader semiconductor index. The significant drop in stock values was evident on July 16, the day the Bloomberg Businessweek interview was published.
In the same interview, Trump targeted large U.S. technology firms, contributing to a sell-off in the tech sector. The Nasdaq 100 fell nearly 10% in the following days, erasing more than $1.7 trillion in market value.
Similarly, Trump’s disparagement of renewable and clean energy companies triggered a steep decline in those sectors, with commentators noting that his criticisms led to a downturn in wind and solar stock values.
The ‘Trump Trade’ and Market Reactions
While some market sectors have seen temporary gains from the speculation of a potential Trump presidency—such as private prisons, predatory lenders, and gun manufacturers, which have faced increased regulation under the Biden administration—these gains have been largely undone in recent weeks. The so-called “Trump Trade” reflects the volatility that accompanies Trump’s unpredictable influence on the market.
Trump’s tendency to target specific companies or industries with his criticisms is not a new phenomenon. During his first term, abrupt tweets, offhand remarks, and sudden policy changes frequently caused sharp declines in the stocks of his targets. For instance, in June 2018, Harley-Davidson’s stock fell nearly 10% over two days after Trump tweeted threats to increase taxes on the company for alleged outsourcing—a claim later proven to be inaccurate.
Markets typically favor stability and predictability—qualities often at odds with Trump’s approach, which has consistently introduced uncertainty and volatility into market behavior.
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