Trump's "Buy Stocks" Effect: S&P 21-Day Rolling Increase Reaches Largest During Trump's Two Terms
After Trump's "buy" call, the S&P 500 index achieved an increase of nearly 20%.
On Monday, according to the joint statement from the China-U.S. Geneva Economic and Trade Talks, the United States and China announced a temporary reduction of tariffs, causing the S&P 500 index to rise nearly 3% in early trading, which means that since President Trump claimed a "major buying opportunity" on April 9, the cumulative increase has reached nearly 17%.
According to data compiled by Bloomberg, this is the largest increase for the S&P 500 index during Trump's two presidential terms (calculated on a 21-day rolling basis, that is, the trading days between the two statements). This data does not include the rebound during the pandemic.
Looking back at the stock market changes over the past few months, Trump's remarks have had a significant impact on the market. In early April, according to CCTV news, the U.S. implemented a 10% general tariff and specific tariff measures on industries such as automobiles, steel, and aluminum, causing the S&P 500 index to drop nearly 19% from its peak in February.
Subsequently, after Trump stated on April 9 that "now is a good time to buy," (a few hours later, he suspended some tariffs), U.S. stocks rebounded over 16% that month.
However, Trump's "buy" call did not stop there. On May 8, Trump reiterated that if trade agreements combined with tax cuts can yield results, "you better go out and buy stocks now." After his speech, U.S. stocks achieved two consecutive days of gains, with the S&P closing up 0.58% that day.
However, currently, market opinions on the U.S. stock market are mixed. BNY Mellon macro strategist Geoffrey Yu believes that we doubt the market will forget what happened in April, but the worst-case scenario has now become a distant memory, and people will allocate assets based on this.
Meanwhile, Morgan Stanley strategist Wilson warns that the U.S. stock market is not yet safe. Bank of America analyst Hartnett, known as "Wall Street's most accurate analyst," predicts that the market will "buy the expectation and sell the fact" after the trade agreement is announced. Singular Bank strategy chief Scholtes warns that even if China and the U.S. reach an agreement, the U.S. stock market is unlikely to quickly return to historical highs. Trade uncertainty has already caused substantial damage to businesses, and investors should maintain a cautious stance.
