Stock futures tumbled early on Friday after President Donald Trump unleashed a string of tweets suggesting the U.S.-China trade war will not be resolved soon. The early morning gyrations illustrate the market-moving power of the president’s Twitter feed.
They’re also a reminder of how presidential tweets can throw automated algorithmic trading programs for a loop.
In the tweet storm, Trump argued that tariffs on $200 billion in Chinese goods are bolstering the U.S. fortunes and laid out a scheme to purchase goods from American farmers and distribute them to poor nations. But one line seemed to catch the market’s attention.
“Talks with China continue in a very congenial manner – there is absolutely no need to rush,” Trump tweeted at 6:53 a.m. ET.
At about 6:54 a.m ET, S&P 500 futures dropped sharply.
Futures slid further, and then stabilized after Trump briefly deleted and then reposted four of the five tweets. The missing tweet — the one in which Trump said there’s “absolutely no need to rush” to reach a trade deal with China — eventually popped back up around 7:45 a.m. ET.
That particular tweet is concerning because Trump has threatened to impose tariffs on the remaining $325 billion worth of Chinese goods not yet subject to U.S. import taxes. Overnight, the Trump administration hiked tariffs on $200 billion of Chinese imports from 10% to 25%, and the odds of reaching a deal by Friday now look slim.
Stock futures eventually fell nearly 1% before clawing back some ground. Traders on twitter complained about the volatility caused in the early morning by Trumps tweets and retweets.
