Democrats Allege Market Turmoil Benefited Insiders Amid Tariff Launch and Sudden Halt

Democratic lawmakers expressed serious concerns Thursday regarding potential insider trading linked to President Donald Trump and his administration. They allege that Trump and selected associates may have financially benefited from confidential information regarding tariffs, which caused significant fluctuations in the stock market.

Senators Mark Kelly, Elizabeth Warren, Chuck Schumer, Ron Wyden, Ruben Gallego, and Adam Schiff formally requested detailed trading records from the White House, particularly focusing on adviser Elon Musk and others who might have had advance notice of Trump’s tariff announcements made on April 2 and the subsequent reversal a week later.

“This sequence of events raises grave legal and ethics concerns,” they stated in a letter to White House Chief of Staff Susie Wiles and Jamieson Greer, the U.S. trade ambassador who also oversees the Office of Government Ethics.

The senators urged the SEC to investigate whether insiders, including Trump’s family, engaged in stock trades based on their foreknowledge of the tariff pause, which could be interpreted as exploiting sensitive information for personal gain. They pointed to a notable 18% surge in Tesla’s stock price following the announcement of the tariff pause, as well as a spike in trading volume leading up to that moment.

Musk, who owns 12% of Tesla, saw an estimated $36 billion increase in his wealth amid the market rally following the pause. Critics, including Gallego, accused Trump of facilitating insider trading, labeling it “corruption at the highest level” on social media.

In his post, Gallego referenced a satirical cover of Trump’s book, “The Art of the Deal,” reimagined as “Trump: Art of the Steal.” The cover features a portrait that Trump previously had removed from the Colorado state Capitol for being unflattering.

White House spokesperson Kush Desai defended Trump, stating it is the president’s obligation to stabilize markets and offer reassurance amid what they termed “media fear-mongering.”

While the senators did not present concrete evidence of insider trading, they were not alone in their allegations. House Minority Leader Hakeem Jeffries called for an investigation into the matter. Many Democrats pointed to Trump’s posts on Truth Social prior to the pause, interpreting them as signals for followers to profit from the market turmoil he had created.

Two messages stood out: one urging calm with the assurance that the U.S. would emerge “bigger and better than ever,” and another directly suggesting it was a “great time to buy.”

As Greer testified before the House Ways and Means Committee when the tariff pause was announced, he was questioned on the implications for market manipulation. “Is this market manipulation?” asked Rep. Steven Horsford, who received a firm denial from Greer. “No, we’re trying to reset the global trade system.”

Following the initial tariff announcement, U.S. markets lost an estimated $10 trillion within three days. However, they rebounded dramatically after the tariff pause, with the S&P 500 experiencing its most significant single-day gain since 2008.

Conversely, the day after the pause, the market faced a retracement; the S&P 500 dropped by 3.5%, the Nasdaq was down 4.3%, and the Dow Jones Industrial Average fell by 2.5%. The senators also expressed concerns about recent budget cuts to the SEC and how those cuts might hinder the agency’s ability to respond effectively to major market events and enforce regulatory actions.

The lawmakers have requested a response to their inquiries by April 25, 2025.