Trump 2.0 Evokes Memory of Social Media Flood and Market Swings

(Bloomberg) - As Republican nominee Donald Trump inches closer to claiming the White House, traders across the world are once again bracing for market-moving posts on social media that characterized his first term as president.

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Trump has been projected as the winner across pivotal battleground states with his party set to control the Senate. Financial markets have swung in expectation of his likely triumph, with S&P 500 futures surging 2.2% and the dollar hitting a one-year high.

For many investors, his second term also means closely monitoring X, formerly known as Twitter, as well as Trump's own social-media platform Truth Social, which he uses as his primary conduit to the public.

"We used to call them Twitter bombs," said Matthew Haupt, a portfolio manager at Wilson Asset in Sydney. "It is how he negotiates," Haupt said when asked if he was expecting some of that social media activity from Trump again.

A victory for Trump and his "America First" policy, which includes sweeping tariffs on foreign-made goods, is widely expected to hurt financial assets across Europe and emerging markets.

In 2017, Trump's mysterious 'covfefe' tweet stumped markets, while in 2020, the former president once tweeted or retweeted just under 40 times in the space of two hours, causing a whiplash in US and international equities.

"It will be 2016 all over again, markets will have to embrace more volatility and moves based on Trump's social media comments," said Wong Kok Hoong, head of institutional equities sales trading at Maybank Securities Pte. "In fact, I have just set up a Truth Social account just to make sure we don't miss anything!"

-With assistance from Winnie Hsu.

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