President Donald Trump’s influence on global markets is well-known. Now, he proposes monetizing this influence. On Saturday, his Truth Social platform will begin selling early access to his posts to Wall Street traders.
This initiative poses ethical concerns about insider trading and the commercial use of public office. While other platforms sell fast-speed feeds, Truth Social is unique. Trump frequently posts impactful changes regarding war, central bank leadership, and tariffs.
“If this was the CEO of a public company, this would be jail time,” said Irene Aldridge, head of Able Alpha Trading.
Criticism of the service is deflected by Truth Social’s parent company, Trump Media & Technology. They accuse critics of misunderstanding capitalism and the distinction between public and private information.
Trump’s posts on Truth Social have notably affected stocks, bonds, and currencies. This volatility is leveraged by high-frequency traders, who exploit price movements within milliseconds.
Recently, Trump hinted at higher tariffs on Canada, affecting the Canadian dollar, nuclear energy stocks, and oil futures. Joe Saluzzi from Themis Trading anticipates substantial interest from high-frequency firms in the service, highlighting its value in providing “market-moving information.”
Named Truth API, the service targets firms that invest heavily in direct news feeds and data connections. Artificial intelligence aids traders by quickly interpreting Trump’s announcements for market decision-making.
Traders gain from Trump’s unpredictable posts, benefiting from price fluctuations both ways. This dynamic is mirrored by other influential contributors on Truth Social, including Trump’s sons, Donald Jr. and Eric.
Truth Social claims simultaneous release of information to traders and the public, insisting fairness. However, Saluzzi argues that the advantage lies in receiving and processing posts faster, disadvantaging retail investors.
“The loser is always the retail investor,” said Saluzzi.
Trump’s posts also affect companies directly, with recent endorsements causing stock spikes. Ethics expert Dylan Hedler-Gaudette from Project on Government Oversight warns of the potential mess caused by Trump’s explicit praises.
The impact was evident in April when Trump praised Palantir Technologies, causing a significant stock jump. Similarly, Intel’s stocks rose after Trump’s commendation in after-hours trading.
Despite inquiries, major high-speed trading firms have not disclosed subscriptions to the service. Even minimal subscription uptake promises a revenue boost for Trump Media, whose stock struggles despite Trump’s contribution to its site’s traffic.
Potential challenges exist if Democrats gain congressional control, possibly initiating investigations. Senator Elizabeth Warren vowed to hold the service accountable for what she deems as open corruption.
Increasing losses at Truth Social might prompt Trump to utilize the platform further for policy announcements. Public Citizen lobbyist Craig Holman anticipates this, citing Trump’s acumen in product promotion.
Source: AP News
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