Following former President Donald Trump’s indictment Thursday, stocks associated with the New York businessman have jumped—and that is not the only effect the legal action may have.
- Earlier this week, Donald Trump was indicted on what is reported to be more than two dozen charges related to business fraud, CNN reports—though the charges ultimately relate to his paying $130,000 to a porn star he is alleged to have had an affair with so that she would not talk about their relationship.
- Blank-check firm Digital World Acquisition Corp., Phunware, and Rumble saw stock market gains following Trump’s indictment.
- All three stocks are associated with the former president. Digital World has plans for a potential merger with Trump’s Truth Social. Phunware helped develop Trump’s mobile app for his campaign. Rumble is a video-sharing platform that works in partnership with Truth Social.
- Stocks associated with Trump frequently rise when the former president appears on the news.
- The indictment may have broader market implications as critics and supporters of Trump clash over fiscal decisions in Congress.
Why it’s news
The indictment from a Manhattan jury marks the first time a U.S. president has been charged with a crime. The two dozen or so charges ultimately relate to the former president paying $130,000 to a porn star he is alleged to have had an affair with so that she would not talk about their relationship. The payment took place shortly before the 2016 presidential election and is thus considered a violation of campaign laws. The indictment is controversial not because people disbelieve it, but rather because it is unprecedented to charge a leading presidential candidate with a crime.
The exact charges have not been made public yet, but the incident is still bound to affect the overall economy—whether directly or indirectly.
For the stock market as a whole, the indictment had little effect because it has been reported to have been coming for weeks. However, the news was evident in Trump-associated stocks. Digital World jumped nearly 7.4% on Friday, Phunware saw a 2.5% increase, and Truth Social a 10% gain, Reuters reports.
Already, Congress is divided along party lines concerning whether or not to raise the debt ceiling. Further division resulting from the Trump indictment could delay solutions to pressing fiscal issues. While some members of the GOP are not supportive of the former president, Trump is considered by many to be the face of the Republican Party. His indictment could dissuade Republicans and Democrats from working together on pressing issues like the debt ceiling.
While Speaker of the House Kevin McCarthy seeks to negotiate with the White House to raise the debt ceiling, he must also convince his party to agree to whatever concessions the negotiations settle on.
Just a few months ago, McCarthy struggled to rally enough support to win his Speaker of the House election. Many members of the Republican group that opposed his election are also ardent Trump supporters. The recent indictment could make it difficult for McCarthy to convince them to agree to debt ceiling negotiations.
In response to the indictment, Trump released a lengthy statement, saying, “This is Political Persecution and Election Interference at the highest level in history. From the time I came down the golden escalator at Trump Tower, and even before I was sworn in as your President of the United States, the Radical Left Democrats—the enemy of the hard-working men and women of this Country—have been engaged in a Witch-Hunt to destroy the Make America Great Again movement … The Democrats have lied, cheated, and stolen in their obsession with trying to ‘Get Trump,’ but now they’ve done the unthinkable—indicting a completely innocent person in an act of blatant Election Interference.”
McCarthy tweeted in support of Trump and attacked the Manhattan District Attorney leading the charge against Trump, Alvin Bragg.
“Alvin Bragg has irreparably damaged our country in an attempt to interfere in our Presidential election. As he routinely frees violent criminals to terrorize the public, he weaponized our sacred system of justice against President Donald Trump. The American people will not tolerate this injustice, and the House of Representatives will hold Alvin Bragg and his unprecedented abuse of power to account,” McCarthy says.
Democrat representatives were largely supportive of the news. Representative Adam Schiff (CA), who led Trump’s first impeachment trial, says, “The indictment of a former president is unprecedented. But so too is the unlawful conduct in which Trump has been engaged.”
Former Speaker of the House Nancy Pelosi (D-CA) also expressed support for the indictment in a tweet: “No one is above the law, and everyone has the right to a trial to prove innocence. Hopefully, the former President will peacefully respect the system, which grants him that right.”