Trump: Stock drop amid good news a ‘big mistake’
President Donald Trump, who has taken credit for a rising stock market as a measure of his own success, complained on Twitter on Wednesday that “good (great) news” in the economy led to an abrupt decline in stock prices, his first comments about the stock market since its sharp drop earlier this week.
In the early-morning tweet, Trump lamented that in the “old days,” stocks would rise on good economic news, saying: “Today, when good news is reported, the Stock Market goes down. Big mistake.” The tweet did not elaborate on what he meant by the “old days” or explain further his analysis of why stocks plummeted Friday and Monday.
Until Wednesday’s tweet, the president had been unusually silent about the stock market, which has been rocked by volatility, including a decline in the Dow Jones industrial average of almost 7 percent over two days. At one point Monday, the Dow was down almost 1,600 points, or about 6 percent of its total value, the markets plunging as Trump was giving a speech in Blue Ash, Ohio. It closed that day down 1,175 points.
Trump’s assertion that the fall was pegged to good economic news stems from Friday’s job report, which showed wages beginning to rise as the economy nears full employment. Rising wages are good for those who receive them, and for the presidents who seek to stimulate them, but investors see them as a sign of possible inflation and higher interest rates. Analysts pegged the sell-off in stocks to the strong employment numbers as investors feared the Federal Reserve might quicken the pace of its interest rate hikes.
White House officials had released only a terse statement after the market’s decline earlier this week. Sarah Huckabee Sanders, the White House press secretary, said in a statement Monday that “the President’s focus is on our long-term economic fundamentals, which remain exceptionally strong, with strengthening U.S. economic growth, historically low unemployment, and increasing wages for American workers.”
On Tuesday, the Treasury secretary, Steven Mnuchin, tried to walk a fine line in distancing the administration from the recent drop in stock prices while still taking credit for the run of success that preceded it.
“We are very focused on long-term economic growth, and we believe that the policies that we have enacted, including tax reform, are very positive for long-term economic growth,” Mnuchin said at a House Financial Services Committee hearing.
Asked after the hearing if the administration would in the future refrain from embracing the stock market as a proxy now that it has become such a volatile measure, Mnuchin made clear that he was not ready to do so.
“We’ve always been looking at the long-term impact of the stock market. It’s still up over 30 percent since the election, and we continue to think America is a great place to do business,” he said.
“We couldn’t be happier with companies’ response with more and more investments in the U.S.”