Trump’s Social Media Moves and Market Impact

In New York, the President of the United States, Donald Trump, has realized the influence his words carry. Now, he plans to monetize that influence. Starting Saturday, his company, Truth Social, will begin offering previews to Wall Street traders willing to pay. This move introduces potential profit for Trump’s enterprise and raises questions about insider trading and using a public office for private gain.

While other social media companies and media providers offer similar high-speed services, Truth Social not only distributes news, it creates it. Trump’s posts often shake markets by announcing policy shifts on topics ranging from war to central bank leadership and tariffs. Irene Aldridge, head of Able Alpha Trading, commented that if a public company’s CEO acted similarly, it would warrant jail time.

Regarding the appropriateness of the new service and any potential review by White House lawyers, Trump’s press office declined to comment, redirecting inquiries to Truth Social’s parent company, which is publicly traded. Trump Media & Technology criticized Democratic opponents, accusing them of ideological opposition to free markets or misunderstanding the distinction between public and non-public information.

Trump’s frequent posts have influenced stocks, bonds, and currencies, creating opportunities for high-frequency traders. These traders specialize in rapid buying and selling, profiting from slight, fleeting price differences.

Already this month, Trump has threatened higher tariffs on Canada, discussed ending a nuclear deal with Saudi Arabia, and considered expanding conflict with Iran. Advanced knowledge of these announcements could have generated profits for traders betting on currency, stocks, and oil futures movements.

Joe Saluzzi, co-founder of Themis Trading, estimates around 100 high-frequency firms might pay for the service, seeing it as market-moving information. The service, known as Truth API, launches when firms are investing in data channels and servers to bypass slower internet connections.

The potential for profit is greater now with artificial intelligence rapidly analyzing posts for market-impacting changes and Trump’s tendency to make online news. His sudden announcements attract traders who profit from price swings. Media posts from Trump, and likely from his sons Donald Jr. and Eric, offer content with the potential to drive market shifts.

Truth Social claims information will be provided to traders and the public simultaneously, maintaining fairness. However, Saluzzi argues that the critical factor is not when posts are distributed, but when they are received. Advanced systems for processing this information will allow some to act faster than average investors, potentially disadvantaging them.

Beyond policy insights, Trump is increasingly posting about publicly traded companies, praising those he favors and causing purchasing frenzies. In one instance, a post about Palantir Technologies led to a brief, significant stock price increase.

It remains unclear which firms are subscribing, as major players like Citadel Securities and XTX Markets have not commented. If just three firms subscribe at $100,000 monthly, Trump Media’s revenue could double, mirroring last year’s $3.7 million income.

Trump Media needs wealthy customers. Truth Social’s parent company has seen its stock value drop by 75% since Trump took office, notwithstanding increased traffic to the site driven by Trump’s major decisions posted there. The White House frequently relays Trump’s Truth Social posts to the press when addressing media queries. If posts are not yet available, journalists are often told, ‘Wait for the Truth.’

Potential challenges for Truth Social could arise if Democrats gain Congressional control and initiate investigations, as promised by Massachusetts Senator Elizabeth Warren. She specifically criticized the new service, calling for accountability for what she termed open corruption.

If the company continues suffering losses, some suggest Trump may intensify the use of his platform for political announcements. Craig Holman from Public Citizen believes Trump will continue to leverage this approach. ‘Trump knows how to sell,’ Holman said.

Contributions to this article came from AP reporters Will Weissert and Josh Boak in Washington.