Why are the financial markets going up and down?
Politics
Why are the financial markets going up and down?
April 8, 2025 | 7:00 PM GMT
The Sidebar panel explains how and why the financial markets are fluctuating as a result of President Donald Trump's sweeping tariffs plan.
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2 Growth Stocks to Stash and 1 to Question
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The president is now attempting to move that case to federal court, where he is betting he'll have an easier shot at arguing that the Supreme Court's immunity decision in July will help him overturn the conviction. Trump's earlier attempts to move the case to federal court have been unsuccessful. US District Judge Alvin Hellerstein, nominated by President Bill Clinton, denied the request in September – keeping Trump's case in New York courts instead. The 2nd Circuit will now hear arguments on Trump's appeal of that decision on Wednesday. 'He's lost already several times in the state courts,' said David Shapiro, a former prosecutor and now a lecturer at John Jay College of Criminal Justice. And Trump's long-running battle with New York Judge Juan Merchan, Shapiro said, has 'just simmered up through the system' in New York courts in a way that may have convinced Trump that federal courts will be more receptive. Trump, who frequently complained about Merchan, has said he wants his case heard in an 'unbiased federal forum.' Trump's argument hangs largely on a technical but hotly debated section of the Supreme Court's immunity decision last year. Broadly, that decision granted former presidents 'at least presumptive' immunity for official acts and 'absolute immunity' when presidents were exercising their constitutional powers. State prosecutors say the hush money payments were a private matter – not official acts of the president – and so they are not covered by immunity. But the Supreme Court's decision also barred prosecutors from attempting to show a jury evidence concerning a president's official acts, even if they are pursuing alleged crimes involving that president's private conduct. Without that prohibition, the Supreme Court reasoned, a prosecutor could 'eviscerate the immunity' the court recognized by allowing a jury to second-guess a president's official acts. Trump is arguing that is exactly what Bragg did when he called White House officials such as former communications director Hope Hicks and former executive assistant Madeleine Westerhout to testify at his trial. Hicks had testified that Trump felt it would 'have been bad to have that story come out before the election,' which prosecutors later described as the 'nail' in the coffin of the president's defense. Trump's attorneys are also pointing to social media posts the president sent in 2018 denying the Daniels hush money scheme as official statements that should not have been used in the trial. State prosecutors 'introduced into evidence and asked the jury to scrutinize President Trump's official presidential acts,' Trump's attorneys told the appeals court in a filing last month. 'One month after trial, the Supreme Court unequivocally recognized an immunity prohibiting the use of such acts as evidence at any trial of a former president.' A White House spokesperson did not respond to a request for comment. If Trump's case is ultimately reviewed by federal courts, that would not change his state law conviction into a federal conviction. Trump would not be able to pardon himself just because a federal court reviews the case. Bragg's office countered that it's too late for federal courts to intervene. Federal officials facing prosecution in state courts may move their cases to federal court in many circumstances under a 19th century law designed to ensure states don't attempt to prosecute them for conduct performed 'under color' of a US office or agency. A federal government worker, for instance, might seek to have a case moved to federal court if they are sued after getting into a car accident while driving on the job. But in this case, Bragg's office argued, Trump has already been convicted and sentenced. That means, prosecutors said, there's really nothing left for federal courts to do. 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The days around Trump's trade war announcements saw spikes in lawmaker stock market transactions
In the days before President Donald Trump suddenly paused most of the punishing tariffs on foreign countries he had revealed in early April, more than a dozen congressional lawmakers were tied to thousands of dollars' worth of stock transactions, including significant purchases as the US stock market tumbled, a CNN analysis of financial filings shows. Seven Democrats and three Republicans reported stock transactions made on April 7, two days before Trump instituted the pause, according to a CNN review of a database of congressional financial filings compiled by Capitol Trades, a platform by the financial data research firm 2iQ which tracks lawmakers' financial activity. That day, a post on X erroneously suggested a pause was already underway, tumbling stocks and sending the markets into a state of turbulence. The next day, on the eve of Trump's tariff reprieve, seven Republicans and four Democrats were tied to transactions, filings show. The White House that day announced it would impose hefty tariffs on China and the S&P 500 closed at its lowest level so far this year. Then came April 9. 'BE COOL!' and 'THIS IS A GREAT TIME TO BUY,' Trump wrote on his Truth Social platform that day, hours before his White House announced a 90-day pause on tariffs against a number of countries save for China. The announcement set the S&P 500 on track to post its biggest single-day gain since October 2008. House and Senate lawmakers on both sides of the aisle have long traded stocks, and their reported transactions so far this Congress have largely mirrored Americans' high volume of trading activity amid the frenetic market shifts fueled by the president's whipsaw economic policy. While lawmakers who spoke with CNN denied having advance briefings, some who bought ahead of the president's tariff reprieve stood to make significant gains after it spurred a market rebound. Lawmakers told CNN the trades were made largely by third-party financial advisors with unilateral control over their portfolios. But experts and some on Capitol Hill say questions around the timing of the transactions strikes at the heart of an ethical and optical question that has long dogged Congress: Can lawmakers play the market without generating suspicion their access to information gives them an unfair advantage, or should they ban the practice altogether? 'At a time where there was significant or important non-public information swirling around Washington, the public can't help but fear that members of Congress are using their access to information to personally profit,' Indiana University Maurer School of Law Professor Donna Nagy, who has testified before Congress on the issue, told CNN after viewing the trading data. 'And whether that perception is true or not, it is destructive. It fuels a corrosive belief that lawmakers are using their positions for purposes of profit and not for the public interest.' Lawmakers, their spouses, and children are permitted to make trades but they are mandated to report any activity done on their behalf within 45 days. They are only required to disclose a monetary value range for trades. From March 31 — just before the president's April 2 'Liberation Day' announcement of tariffs of at least 10% across all countries — through the April 9 pause, a total of 35 lawmakers (19 Republicans and 16 Democrats) reported purchases between about $8.6 million and $27.9 million and sales between about $5.9 million and $22.4 million across 1,265 transactions. Not all of the trades were individual stocks; some involved were mutual funds or public bonds. From March 31 through April 9, Democratic Rep. Ro Khanna reported the most transactions at 438, while GOP Rep. Kevin Hern reported the single highest-value transaction of up to $5 million on April 4. Eleven lawmakers reported one transaction. Fourteen lawmakers reported two transactions or fewer. The transactions Khanna reported, his communications director Sarah Drory told CNN, were not stock trades but part of a trust managed by an independent third party that stems from money his wife had before they were married. Hern spokeswoman Miranda Dabney, meanwhile, told CNN: 'Rep. Hern does not have day-to-day management or control over his stock portfolio or his businesses.' In statements provided to CNN, representatives for the lawmakers who reported trades during that period pointed to various agreements with third-party financial advisors and noted that some purchases were bonds and not individual stocks. The offices told CNN the lawmakers are not directly involved in the purchases. 'President Trump was telling the entire world for months, and even decades, about the benefits of tariffs. It was even a central component of his 2024 presidential campaign. Suggesting any behind-the-scenes coordination is ridiculous,' a spokesperson for Rep. Marjorie Taylor Greene said, pushing back on concerns around the timing of the trades. The Georgia Republican – whose 11 reported purchases on April 8 included between $1,000 and $15,000 worth of stock each, according to the filings – does not direct her own trades but instead has a fiduciary agreement with her portfolio manager, the spokesperson said. Around Trump's trade war, a number of Republicans publicly pledged support for Trump's economic policy while protecting their own financial interests. Sen. Markwayne Mullin sold between $290,000 and $700,000 in stocks across industries from a joint account on April 8 through 'an independent, third-party operator firm that manages all stock portfolio investments on his behalf,' according to his spokesperson. At the same time, the Oklahoma Republican was publicly supporting the president's escalating trade war, despite the financial decisions that appeared to mirror broader consumer concerns. Hern, the fourth-highest ranking Republican in the House said on February 13, shortly after Trump announced 25% tariffs on steel and aluminum imports from all countries: 'These reciprocal tariffs will incentivize other nations to level the playing field and remove long-standing, exorbitant tariffs.' On March 31 — two days before Trump announced expansive tariffs on April 2 — a trust affiliated with Hern sold between $500,000 and $1 million worth of structured investments. For Rep. Chip Roy of Texas, one of the Republicans behind the push to ban lawmaker stock trading, having an intermediary conduct the trades does little to assuage concern. 'Members of Congress should come here to advance the interests of their constituents, not to enrich themselves using stock trading,' Roy said. Rhode Island Rep. Seth Magaziner, one of the leading negotiators on the Democratic side of the effort to ban congressional stock trading who participates in regular meetings on the issue, similarly told CNN: 'We should eliminate the opportunity for members of Congress to engage in any sort of insider trading because the opportunity clearly exists.' The director of government affairs at the Project on Government Oversight Dylan Hedtler-Gaudette told CNN, 'You occasionally have these moments where it really clarifies and distills down just how bad this is. And I think the tariff announcements and subsequent trades and transactions are a prime example of that.' March 3 — the day before Trump levied an additional 10% tariff on China and a 25% tariff on Mexican and Canadian imports with some exceptions — saw the highest number of lawmakers reporting stock trading in a single day through mid-April, according to CNN's analysis. Sixteen lawmakers, evenly split among Democrats and Republicans, reported hundreds of thousands of dollars' worth of transactions that day — most of them purchases. The president had confirmed at an afternoon White House event on March 3 that the tariffs would take effect the next day, leading to a sharp selloff in stocks. At that point, March 3 had so far been the worst day for the market. Pennsylvania Republican Sen. Dave McCormick, who reported purchases between $50,000 and $100,000, was the only lawmaker to report having personally traded on March 3. McCormick did not respond to multiple requests for comment. Lawmakers reached by CNN sought to distance themselves from the transactions filed during those key dates around Trump's tariffs announcements. CNN reached out to the 16 lawmakers who reported transactions on March 3, and the 35 lawmakers, some of whom overlapped, who reported having transactions between March 31 and April 9. Those who responded to CNN said they were unaware of trades being made through various agreements with financial advisors. They said the filings did not reflect traditional stock trades and that they had no interactions with the administration around key announcements. Some told CNN the filings reflected trades or reinvestments through a joint account or by a spouse. Democratic Rep. Josh Gottheimer is waiting on congressional approval for a blind trust, a spokesman told CNN. GOP Rep. Bruce Westerman, meanwhile, has instructed his investment advisor to not invest in individual stocks and is in the process of putting his assets back into a fund, after receiving heat for recent investments, spokesperson Kinsey Featherston shared. Democratic Rep. Julie Johnson has begun the process of divesting her stocks, managed by an independent third party, into ETFs and mutual funds upon becoming a member of Congress, her spokesperson told CNN. Some said they supported efforts to ban lawmaker trading of individual stocks, even those with active portfolios, including Khanna and GOP Rep. Rob Bresnahan. The STOCK Act passed with overwhelming support in 2012 to increase transparency about lawmaker stock trading and made it illegal for lawmakers to use inside information for financial benefit. But lawmakers and experts argue problems persist with existing reporting structures and enforcement mechanisms. Along with only being required to report a monetary range of transactions, lawmakers also don't report the timing of a trade on a given day, which could be useful context for those determining whether seemingly well-timed trades could be based on non-public information. There is also currently no designated oversight body to determine whether lawmakers hold a conflict of interest in their trading practices. Legal experts say that even lawmakers who use financial advisors to trade on their behalf are not necessarily insulated from scrutiny, and it depends on the details of the agreement. The $200 fine for late filings is hardly a deterrent, experts argue. 'That doesn't pass the sniff test even a little bit because there is no guarantee that they're not talking to those people because there is no prohibition against them from talking to those financial advisors,' Hedtler-Gaudette said of the arrangements most lawmakers have with their financial advisors. As efforts to ban congressional stock trading have fallen short, scholars and ethics experts have argued that members of Congress are privy to more information than the average American and are often faced with legislative decisions that overlap with their investment portfolios. 'It is essentially completely legal for a congressman, congresswoman or senator to go to Goldman Sachs, Blackrock or Vanguard and be like, 'Hey I'm proposing this regulation, what do you think will be the impact on the market?' There is nothing to stop you from that,' said Dr. Jan Hanousek Jr., an assistant professor at the University of Memphis who has studied the patterns of lawmaker stock trading. 'This is an insane problem.' Beyond ethics concerns, a 2022 Fox News poll found that 70% of respondents supported banning members of Congress and their families from trading stock, while a January UC San Diego study found that even when lawmakers make their trading practices public, it 'erodes' the legitimacy of Congress. The push to ban lawmaker stock trading last peaked when dozens of federal officials and some lawmakers made lucrative stock and mutual fund trades as the government was preparing for the financial onslaught of the Covid-19 pandemic in early 2020. The Department of Justice has since closed investigations into the moves. But in a sign this Congress' bipartisan group of lawmakers may be closer to finding the political will to ban the practice, House Speaker Mike Johnson, House Minority Leader Hakeem Jeffries and the president himself have publicly supported the effort, following news of lawmaker stock trading activity around the tariff announcements. 'I have been working on this issue for years,' Roy told CNN. 'We can and should fix the problem during this term now that President Trump and the Speaker have signaled their support for the measure. We have the will and the mandate of the American people to do this. Let's deliver.' CNN's John Towfighi contributed to this report.
