Markets

Here are 3 times when Trump's comments shocked financial markets

Key Points
  • Bank stocks dive and then recover in tumultuous trading Monday after Trump's comments about possibly breaking them up.
  • This is not the first time the new president has unnerved the financial markets with his off-the-cuff remarks.
  • Earlier this month, the president caused sudden volatility with the U.S. dollar and the Mexican peso on separate occasions.
Bove: Goldman Sachs the only winner if Trump breaks up the banks
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Bove: Goldman Sachs the only winner if Trump breaks up the banks

President Donald Trump's unusual comments on markets or market-sensitive policies have often moved prices in sudden fashion, keeping Wall Street traders on their toes.

Here's a list of three instances in just the last month when the unpredictable president caught markets flat-footed:

1. Bank stocks — May 1

The president said Monday in an interview with Bloomberg News that he is considering breaking up the largest U.S. banks, keeping with a presidential campaign promise.

Bank stocks immediately dropped — the SPDR Financials ETF (XLF) fell about 0.74 percent from session high to low — before recovering to trade more than two-thirds of a percent higher on the day.

The SPDR Financials ETF (XLF — left) and SPDR S&P Bank ETF (KBE — right)

Source: FactSet

2. U.S. dollar — April 12

The U.S. dollar index dropped half a percent in less than 15 minutes following Trump's comments in a Wall Street Journal interview that the currency was "getting too strong." The dollar has since weakened further and is 3 percent lower for the year so far.

US dollar index 1-month performance

Source: FactSet

3. Mexican peso — April 26, 27

The swung last week as traders worried about the future of the North American Free Trade Agreement, a deal among the U.S., Mexico and Canada.

The peso first dropped 2 percent against the dollar last Wednesday after a senior Trump administration official said a draft executive order could withdraw the U.S. from NAFTA.

The currency then recouped about half those losses Thursday. Trump said he was optimistic about renegotiating NAFTA rather than pulling out of it after he received calls from the leaders of Mexico and Canada on the topic.

Dollar-Mexican peso 5-day performance (y-axis inverted)

The peso has been a measure of market sentiment on Trump since late last summer before the election. The peso repeatedly fell to record lows against the U.S. dollar in the last several months as traders worried about how U.S. protectionism could hit the Mexican economy.

— CNBC's John Melloy and Reuters contributed to this report.