Investors are anxiously awaiting the verdict following Donald Trump’s guilty verdict.
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A Manhattan jury on Thursday found former President Donald Trump guilty on all 34 counts of falsifying business records in his long-running hush-payment criminal trial. Investors and politicians around the world are eagerly awaiting the sentencing hearing on July 11 to find out whether Trump will receive prison time for the felony crimes he was convicted of. Will the stock market crash?
Well, if today’s drop is any indication, maybe.
The stock market is falling again today following yesterday’s shocking news. S&P 500 It was down about 0.5% in the afternoon. Nasdaq Composite Index It expects a loss of 1.2%.
This week’s guilty plea caps an indictment against Trump that was first filed in March 2023. Prosecutors alleged that Trump engaged in an illegal conspiracy to interfere with the 2016 election. They also accused Trump of engaging in an “illegal scheme to conceal negative information,” which included paying $130,000 in hush money to adult film star Stormy Daniels.
Predictably, Trump is not pleased with the outcome of the trial.
“This has been a rigged, dishonorable trial,” Trump told reporters after leaving the courtroom. “The real verdict will be given by the American people on November 5th. The American people know what happened here, everybody knows what happened here.”
This week’s news makes Trump the first former president in U.S. history to be indicted on a felony charge.
What would a Trump conviction mean for the stock market crash?
Trump’s direct stock market ownership is limited to his media companies. Trump Media and Technology (Nasdaq:David), which is unsurprisingly falling today. As of this writing, DJT shares are down more than 4%.
The company is extremely valued, especially given its current scale of operations: Trump Media has a market cap of over $8 billion, despite reporting revenue of just $770,000 in the first quarter of 2024, a decline of more than 30% year over year.
On paper, Trump Media is the primary source of Trump’s wealth. In fact, Trump’s majority stake in the company is worth more than $5 billion, but he cannot sell or borrow against his DJT shares until September of this year.
Trump’s social media company, Truth Social, has become a forum for criticism since the conviction, with many of the former president’s strongest supporters flocking to the platform to air their frustration with the trial’s outcome.
“We are all donating to the Trump campaign and buying stock because we are sick and tired of this false verdict and want to live in a world with a better and stronger America,” one Truth Social user wrote.
While today’s news will only have an indirect effect on the stock market, its true impact will be felt this November. In fact, we can expect some increased volatility in the election cycle as investors react to election-related news. As a reminder, there is no law prohibiting convicted felons from running for or seeking office in the executive branch.
On the date of publication, Shrey Dua did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the author in accordance with InvestorPlace.com’s Publishing Guidelines..
