Former President Donald Trump’s indictment and subsequent arraignment have had minimal effect on the stock market, but the unprecedented prosecution could have greater economic implications.
- Last week Trump was indicted on 34 felony counts of falsifying business records. During his arraignment on Tuesday, the former president pleaded not guilty to all charges.
- Shortly after the indictment, several stocks related to Trump rose. These stocks are often boosted whenever the New York businessman is in the news.
- However, at least one of these stocks—Digital World Acquisitions—is trending down following Trump’s arraignment.
- The markets may have largely shrugged off the legal battle for now, but further political division caused by the charges could have lasting effects on economic decisions.
Why it’s news
Despite the political shockwaves Trump’s charges sent through the country, the markets have been relatively unchanged as a result, largely because it has been pending news for weeks. Blank-check firm Digital World, Phunware, and Rumble saw stock market gains following Trump’s indictment. All three stocks are associated with the former president.
Digital World saw a sudden turnaround just a few days after its rise. On Tuesday, it closed 8% lower after announcing there would be a delay in its financial statement filings, Business Insider reports.
Phunware saw a slight drop, and Rumble was deemed volatile after Trump announced he would use the social-media platform to deliver live remarks following the arraignment.
The immediate market effects of Trump’s arraignment are less concerning than the potential far-reaching influence on the broader economy. The legal battle will likely spur further division in the country as one-half feels strongly that Trump’s treatment is unfair and politically motivated, and the other insists that his arrest is overdue.
Many Democrats, including Representative Adam Schiff (CA)—who led Trump’s first impeachment trial—supported the indictment. “The indictment of a former president is unprecedented. But so too is the unlawful conduct in which Trump has been engaged,” Schiff says.
However, the former president has received some support from those who typically oppose him. For example, Senator Mitt Romney (R-UT) released a statement saying, “I believe President Trump’s character and conduct make him unfit for office. Even so, I believe the New York prosecutor has stretched to reach felony criminal charges in order to fit a political agenda.”
Republican leaders, including Speaker of the House Kevin McCarthy (CA), have expressed support for the former president and condemned the indictment.
The increased division between political parties will make it more difficult for an already divided Congress to pass legislation. 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.
Despite the turmoil, Trump, ever the businessman, is taking advantage of what could looks to be a boost for his presidential campaign. Following the indictment, Trump’s campaign website has turned from the standard model to an entirely fundraising-focused page.
“The Left thinks that if they bury me with enough witch hunts and intimidate my family and associates that I’ll eventually throw up my hands and give up on our America First movement.
Let me be as clear as possible: I WILL NEVER STOP FIGHTING FOR YOU,” the landing page reads.
The Trump campaign claims that in the day following the announcement of the charges, it raised $4 million. Trump’s team has also been upping its advertising plans. During Trump’s arraignment, the group ran $60,000 worth of ads, according to substack Yellow.
Along with increased calls for fundraising, the team has rolled out new merchandise, including “I Stand With Trump” t-shirts, “Trump Was Right” yard signs, and “Again!” t-shirts.