- Senators Schiff and Gallego demand ethics probe into White House actions
- Markets surged 7-12% after Trump's social media post and tariff announcement
- Questions raised about private information access before policy shifts
The political firestorm follows Wednesday's dramatic market movements tied to presidential communications. Senators Adam Schiff (D-CA) and Ruben Gallego (D-AZ) formally requested an Office of Government Ethics investigation into whether administration officials profited from advance knowledge of tariff reductions. Their letter cites unusual trading patterns preceding the 7.8% Dow Jones Industrial Average jump – its largest single-day gain since 2020.
Financial analysts note the Nasdaq Composite's 12% surge marked its strongest performance in four years, with trading volume doubling historical averages in the hour following Trump's THIS IS A GREAT TIME TO BUY!!!Truth Social post. The senators' inquiry focuses on three critical hours between the president's online activity and official tariff announcement, during which S&P 500 futures rose 4.2%.
Historical precedent adds context to the controversy. A 2022 University of Chicago study revealed federal policy announcements generate 73% more market volatility when preceded by ambiguous social media posts from officials. The Midwest Automotive Coalition reports Michigan-based suppliers saw 18% stock increases post-announcement, contrasting with 2% gains for foreign competitors.
White House Press Secretary Karoline Leavitt defended the administration's transparency, stating 75 nations had engaged in tariff negotiations. However, ethics experts highlight potential conflicts under 18 U.S. Code § 208, which prohibits executive branch employees from participating in matters affecting their financial interests. The requested probe would examine communications between White House staff, external advisors, and financial institutions during the policy formulation period.
MarketWatch data shows unusual options activity in transportation sector ETFs hours before the tariff news broke, with put/call ratios dropping to 0.38 – well below the 0.61 yearly average. This technical indicator suggests sophisticated traders anticipated bullish market conditions. The senators' letter specifically requests trading records for 22 administration officials with portfolio management responsibilities.
Global markets responded unevenly to the policy shift. While European indices gained 3-5%, Asian markets remained flat due to ongoing China tariff uncertainties. The regional disparity highlights complex international trade dynamics that could influence future investigations. Legal analysts suggest the probe might parallel 2017 Congressional reviews of healthcare stock trades during ACA repeal debates.