TRUMP: The sock market made a 'big mistake' by falling after so much 'good news' about the economy
- President Donald Trump finally weighed in on the recent stock market volatility in a tweet Wednesday.
- Trump said the market dropped because of "good news" about wages and the economy, partially what economists have suggested as well.
- Trump had so far stayed silent about the market.
President Donald Trump on Wednesday broke his silence about the stock market's recent tumbles and volatility via Twitter, arguing the decline was a "big mistake" that happened in the face of a strengthening US economy.
"In the 'old days,' when good news was reported, the Stock Market would go up." Trump said. "Today, when good news is reported, the Stock Market goes down. Big mistake, and we have so much good (great) news about the economy!"
Members of Trump's administration have attempted to deflect concern about the recent sell-off. Trump had not weighed in on the recent slide despite frequently touting the stock market's post-election rise during his first full year in office.
Trump's tweet came two days after the Dow Jones industrial average fell nearly 1,200 points on Monday, its largest one-day point drop ever. The drop was relatively smaller on a percentage basis, but it triggered concern from investors about the market's stability.
Trump's tweet echoed an argument from administration officials, some Republican lawmakers, and market analysts, who have all argued that improving wage and inflation trends may have spooked investors.
Their concern has been predicated on a fear of the economy overheating, or getting too strong. For the past few years, the US economy has seen a gradual improvement in labor market and economic conditions, along with low inflation.
On Friday, however, a pick-up in wages reflected in January's jobs report, along with other concerns about the future of inflation, led to speculation that the Federal Reserve would increase its pace of interest rate hikes. That could tamp down economic growth and possibly diminish future market returns.
Increased wage inflation could also eat into company earnings. Stock moves are partially predicated on expectations of future earnings for such firms.
Economists and analysts have pointed to other reasons for the drop, such as technical selling due to pressure in some volatility products and algorithmic selling.
While the sell-off was particularly intense on Friday and Monday, the major US stock market indexes had been sliding since their most recent highs on January 26.
Trump's silence on the market was notable given how much the president has typically touted stock surges. Based on a Business Insider analysis, Trump typically tweets about the market every 6.5 days. He had not done so since January 20 prior to Wednesday's tweet.