The editorial by Caixin Securities on April 10th (edited by Xiao Xiang) reported that Trump's tweet suggesting "buying stocks" and the U.S. decision to temporarily refrain from imposing reciprocal tariffs on multiple countries drove the S&P 500 index to post its third-largest single-day gain since World War II on Wednesday.

However, as this epic stock market rally unfolded, more and more doubts began to surface—several U.S. senators criticized and questioned on Wednesday whether there was any possibility or motivation for insider trading in Trump's decisions?

Among them, the most prominent was a local media interview with Adam Schiff, a Democratic senator from California. In the interview, he called for Congress to investigate whether Trump engaged in insider trading or market manipulation when he suddenly suspended a series of comprehensive tariffs.

Schiff pointed out that the constant imposition and suspension of tariff policies certainly caused severe damage to the market, but there was another deeper danger: insider trading within the White House and government.

"You might have seen Trump's tweet earlier saying it's a good time to buy. So the question is, what will the president do between this tweet and his announcement to lower tariffs on most countries other than China? Will people around the president trade stocks knowing that the market is about to experience such violent fluctuations?" Schiff asked.

Schiff noted that after all, this is a president who traded his own meme coins while in office, and his children were hyping their own cryptocurrencies. There are also figures like Elon Musk within the government who abuse their power for personal gain. Facing such a corrupt administration, we must ask: Are insiders profiting from inside information while ordinary people's savings and retirement accounts are being drained?

Schiff said, "We are writing to the White House for answers. Of course, I fully understand that the White House is probably the least likely institution to be transparent—regarding any corruption of this administration. We cannot just stay at the level of requesting answers; we must use necessary oversight mechanisms to uncover the truth."

It is worth noting that Schiff has long been one of the harshest critics of Trump's policies. He served as the chief prosecutor during Trump's first impeachment trial and played a core role in the congressional response to the Department of Justice's "Russia investigation." On Wednesday, Schiff became the first senator to publicly call for a congressional investigation into potential insider trading by the Trump administration.

Multiple Democratic senators echoed

In general, investigations into insider trading typically fall under the jurisdiction of powerful committees in Congress such as the Senate Judiciary Committee or the Senate Finance Committee.

But the problem is that the current chairmen of these two committees are both Republicans—Chuck Grassley of Iowa and Mike Crapo—who are unlikely to directly confront the White House. While lawmakers like Schiff can conduct investigations using their personal office teams, such investigations lack subpoena power and are difficult to obtain useful information.

For this reason, many other Democratic senators joined Schiff's camp on Wednesday to push Congress to take this issue seriously.

Elizabeth Warren, a well-known Democratic "troublemaker" senator, posted on X: "I urge an investigation into whether President Trump manipulated the market to benefit his Wall Street donors—at the expense of the American people and small businesses."

"Did Trump help insiders profit from his unpredictable tariff policies? This certainly looks like corruption," Warren said.

Tim Kaine, a Democratic senator from Virginia, said, "When my barber asks me if Trump shorted or profited from the previous market downturn, it shows that many people are skeptical of the current situation."

Tina Smith, a Democratic senator from Minnesota, when asked whether there should be an investigation into Trump's potential market manipulation, said, "That's a good question. He could indeed profit from it. I hadn't thought of that before."

Options Moving Prematurely, Rumors Abound

In fact, the most controversial aspect of Trump's actions last night was his several social media posts roughly three hours before the announcement of the decision to temporarily refrain from imposing additional tariffs (shortly after the start of U.S. stock trading).

Trump then stated, "Stay calm! Everything will be fine. America will be stronger than ever, stronger than ever!" He later added, "Now is a good time to buy!!! DJT."

"DJT" is not only the initials of Trump's name but also the stock code for Trump Media & Technology Group. Trump Media & Technology Group is the parent company of Truth Social, and Trump holds a majority stake in the company.

Market participants noticed abnormal movements in zero-day options (0DTE) of SPY (S&P 500 ETF) during the period before Trump's tweets. Someone bought over 50,000 0DTE contracts at strike prices of 532-535 dollars when the price was still at 493 dollars, indicating expectations for a 10% increase in SPY.

Some options eventually yielded returns as high as 2000%-3000%.

On social media, many ordinary American users also fiercely discussed whether Trump had insider trading behavior. One user wrote on Twitter: "Trump preemptively announced the suspension of tariffs, claiming it's a good time to buy! This is three hours earlier than major market news announcements. This is unprecedented madness."

Another user commented: "Trump has been manipulating the market so his wealthy friends can buy at low prices. His actions should be investigated as insider trading."

It is known that starting at 1:20 PM Eastern Time on Wednesday, searches for the specific phrase "market manipulation" surged on Google, and the word has also become a hot topic on the X platform.

(Caixin Securities, Xiao Xiang)

Original source: https://www.toutiao.com/article/7491565279281939007/

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