It’s been a volatile few days at the US stock market since President Donald Trump announced his ‘Liberation Day’ tariffs on April 2.
The markets dipped down to the brink of confirming a bear market, stoking fears of ‘Black Monday 2.0’. It then bounced back on Wednesday when Trump said he would temporarily lower the hefty tariffs on dozens of countries while further ramping up pressure on China, prompting a massive relief rally, sending the S&P 500 up nearly 10 per cent, its biggest one-day jump since October 2008.
Now, the US president is facing accusations of insider trading with Democrats such as Senator Elizabeth Warren, Adam Schiff among others demanding a probe, alleging that Trump had indulged in market manipulation.
But wait… How did this happen?
‘It’s a good time to buy’
This entire saga started with a tale of two social-media posts on Wednesday. Shortly after the US stock market opened, Trump posted on his Truth Social network in all caps: “This is a great time to buy! DJT. ”
Less than four hours after that, he once again took to his social media network, making, perhaps, the biggest U-turn in his second term as he announced that he was
pausing the harshest of his tariffs on most countries for 90 days.
Stocks immediately skyrocketed in relief; the S&P 500 blue chip index closed up by more than nine per cent, the Nasdaq shut more than 12 per cent up and the Dow soared nearly eight per cent. Asian and European markets too saw a upward swing and London’s FTSE 100 index rose by as much as four per cent in early trading.
According to a CNBC report, investors who followed President Donald Trump’s blunt advice to buy stocks Wednesday morning got a windfall when the he later retracted some of his market-roiling tariffs.
The report further elaborated with Trump Media & Technology Group — the business that controls Truth Social. Soon after Trump posted his earlier message with his initials, the stock of the company — which shares the same alphabets on the ticker — popped up. The stock then fell to $16.69 in the minute of his post. However, then soared as high as $20.40, marking a jump of around 22.2 per cent and finished the session up more than 21 per cent, its strongest day this year.
Similar was the situation with Tesla stock. The Elon Musk-owned firm’s shares surged as high as $274.69 in afternoon trading, reflecting a 21.4 per cent gain. Tesla shares soared more than 22 per cent in the trading day as a whole, recording its best session since 2013.
‘How is this not market manipulation’
The timing of the US president’s posts and subsequent huge share jumps quickly gave way to accusations of market manipulation from several Democrats.
As Representative Mike Levin, Democrat of California, wrote on social media, “How is this not market manipulation? If you’re a Trump supporter and you did what he said and you bought, then you did great. On the other hand, if you’re a retiree or a senior or somebody in the middle class over the last few days that didn’t have the tolerance for risk and you decided to sell, you got screwed.”
The Democratic senator Chris Murphy also wrote on X that an “insider trading scandal is brewing … Trump’s 9:30am tweet makes it clear he was eager for his people to make money off the private info only he knew. So who knew ahead of time and how much money did they make?”
An insider trading scandal is brewing.
Trump’s 9:30am tweet makes it clear he was eager for his people to make money off the private info only he knew. So who knew ahead of time and how much money did they make? pic.twitter.com/AJbtEq372n
— Chris Murphy 🟧 (@ChrisMurphyCT) April 10, 2025
Alexandria Ocasio-Cortez, a House representative from New York, wrote on X: “Any member of Congress who purchased stocks in the last 48 hours should probably disclose that now. It’s time to ban insider trading.”
In fact, Alexandria Ocasio-Cortez, Steven Horsford, Mike Levin, Seth Magaziner, David Min and Joe Neguse — all Democrats — called on House Speaker Mike Johnson to request that every House lawmaker release their trading transactions from April 2-9.
“It would be unconscionable for any member of Congress to use their personal position to benefit financially, especially in a time where Americans across the country are experiencing financial chaos,” they wrote Thursday. “The American people deserve to know if any representatives took advantage of their positions for personal gain.”
Democrat Senators Elizabeth Warren,
Adam Schiff and Ruben Gallego went a step further, demanding an inquiry into the matter. Schiff and Gallego sent a letter to the White House, requesting “an urgent inquiry into whether President Trump, his family, or other members of the administration engaged in insider trading or other illegal financial transactions, informed by advanced knowledge” of his tariff policy changes.
Meanwhile, Warren called for an investigation, asking on the floor of Congress if this was “corruption in plain sight.”
Subsequently, House Minority Leader Hakeem Jeffries, a New York Democrat, said on Thursday that House Democrats will be launching investigations into “possible stock manipulation.”
For those who are unaware, market manipulation as per US Securities and Exchange Commission is when “someone artificially affects the supply or demand for a security,” which can include spreading false information or rigging quotes, prices, or trades to make it look like there is more demand.
Insider trading, meanwhile, is the “buying or selling a security, in breach of a fiduciary duty or other relationship of trust and confidence, on the basis of material, nonpublic information about the security.”
When asked about these allegations, White House, officials refuted them, with Press Secretary Karoline Leavitt, saying it was his “art of the deal” at work.
Meanwhile, Kush Desai, a White House spokesman, said, “It is the responsibility of the president of the United States to reassure the markets and Americans about their economic security in the face of nonstop media fear-mongering.
“Instead of grasping at straws to play partisan political games, Democrats should focus on working with the administration to restore American greatness.”
Experts on Trump’s alleged market manipulation
But many don’t buy the White House officials’ statements and believe that an investigation should be called. Karen Woody, professor of law at Washington and Lee School of Law told the Associated Press that these allegations were “valid.”
“This isn’t a witch hunt, where it seems like allegations that have come out of thin air. This is a pretty clear example of what we would say is some potential of real market manipulation by someone who has the ability to move the markets,” Woody says.
And others agree with Woody. Richard Painter, a law professor at the University of Minnesota, who previously served as the chief ethics lawyer for President George W Bush, told NPR“We can’t have senior public officials — including the president – talking about stock prices and where to buy or to sell at the same time as they are making and announcing decisions that have a dramatic impact on stock prices.”
However, he didn’t accused Trump of market manipulation, but stated that the president had a track record of pushing the boundary.
There are other experts that believe that it will be hard to prove Trump indulged in either market manipulation or insider trading. As Stephen Findeisen, better known as Coffeezilla on X and YouTube wrote, “It’s really the perfect plausible deniability,” referring to traders who bought after Trump said to buy.
“Some people knew the president was going to drop the tariffs, and some people didn’t,” Findeisen said. “If those people who knew traded on that information but said I just followed the public advice how can you prove otherwise?”
With inputs from agencies
