Trump's tweets swing stock market amid trade deal uncertainty

Key Points
  • Stock futures drop after President Donald Trump tweets there's "absolutely no need to rush" to reach a trade deal with China.
  • The tweet comes after Trump hiked tariffs on $200 billion in Chinese goods from 10% to 25%.
  • Trump is threatening to impose tariffs on $325 billion in Chinese imports not subject to import taxes.
President Donald Trump talks to reporters as he departs for travel to Indianapolis, Indiana from the White House in Washington, U.S., April 26, 2019.
Jonathan Ernst | Reuters

Stock futures tumbled early 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 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 Trump's tweets and retweets.