Trump makes baseless claim that the stock market is plunging because of the prospect of Democrats investigating him

  • President Donald Trump attempted to link the possibility that House Democrats could investigate him to a recent downturn in stocks.
  • "The prospect of Presidential Harassment by the Dems is causing the Stock Market big headaches!" Trump tweeted Monday.
  • After taking back the House in the midterm elections, Democrats could now look into the president's tax returns — and with them his finances and potential conflicts of interest.
  • But while the investigations are a real possibility, most market analysts attribute the recent decline to weak guidance by major companies and fears over trade war escalation — not the midterm results.

President Donald Trump on Monday attempted to pin a recent decline in stocks on Democrats, baselessly blaming the possibility of numerous investigations by House committees.

"The prospect of Presidential Harassment by the Dems is causing the Stock Market big headaches!" Trump tweeted Monday.

The Dow Jones Industrial Average was down just over 400 points as of 11:30 a.m. ET.

While the stock market has been on rough footing lately, most analysts attribute the issues to major companies signaling weaker-than-expected future earnings and continued trade war fears, rather than the results of the midterm elections.

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Midterm election night in America 2018
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Midterm election night in America 2018
A rainbow forms over the U.S. Capitol as evening sets on midterm Election Day in Washington, U.S. November 6, 2018. REUTERS/Jonathan Ernst TPX IMAGES OF THE DAY
Democratic Texas U.S. Senate candidate Rep. Beto O'Rourke is accompanied by his wife Amy as he concedes to Senator Ted Cruz at his midterm election night party in El Paso, Texas, U.S., November 6, 2018. REUTERS/Mike Segar TPX IMAGES OF THE DAY
Supporters for Republican gubernatorial candidate Ron DeSantis celebrate during his midterm election night party in Orlando, Florida, U.S. November 6, 2018. REUTERS/Carlo Allegri TPX IMAGES OF THE DAY
Georgia Democratic gubernatorial nominee Stacey Abrams speaks to supporters during a midterm election night party in Atlanta, Georgia, U.S., November 7, 2018. REUTERS/Leah Millis TPX IMAGES OF THE DAY
California Democratic gubernatorial candidate Gavin Newsom hugs his wife Jennifer as he celebrates being elected governor of the state during an election night party in Los Angeles, California, U.S. November 6, 2018. REUTERS/Mike Blake TPX IMAGES OF THE DAY
Democratic congressional candidate Ilhan Omar is greeted by her husband’s mother after appearing at her midterm election night party in Minneapolis, Minnesota, U.S. November 6, 2018. REUTERS/Eric Miller TPX IMAGES OF THE DAY
Democratic U.S. Senator Bob Menendez reacts after appearing at his midterm election night party in Hoboken, New Jersey, U.S., November 6, 2018. REUTERS/Brendan McDermid TPX IMAGES OF THE DAY
Republican U.S. Senate candidate Rick Scott holds the hand of grandson Auguste Guimard as he waves to supporters at his midterm election night party in Naples, Florida, U.S. November 6, 2018. REUTERS/Joe Skipper TPX IMAGES OF THE DAY
Democratic gubernatorial candidate Gretchen Whitmer reacts with her daughters, Sydney (L) and Sherry after declaring victory at her midterm election night party in Detroit, Michigan, U.S. November 6, 2018. REUTERS/Jeff Kowalsky TPX IMAGES OF THE DAY
A supporter of Trump and Republican senate candidate Mike Braun attends the election night party in Indianapolis, Indiana, U.S. November 6, 2018. REUTERS/Chris Bergin TPX IMAGES OF THE DAY
Deidre Brown Collins holds her daughter, Vitalia Collins, as they watch returns during a midterm election night party for Georgia Democratic gubernatorial nominee Stacey Abrams in Atlanta, Georgia, U.S., November 6, 2018. REUTERS/Leah Millis TPX IMAGES OF THE DAY
Supporters of Republican U.S. Senator Ted Cruz hold signs at his midterm election night party in Houston, Texas, U.S., November 6, 2018. REUTERS/Cathal Mcnaughton TPX IMAGES OF THE DAY
Supporters of Democratic Florida gubernatorial nominee and Tallahassee Mayor Andrew Gillum react as they listen to him concede the race to U.S. Rep. Ron DeSantis at Gillum's midterm election night rally in Tallahassee, Florida, U.S. November 6, 2018. REUTERS/Shannon Stapleton TPX IMAGES OF THE DAY
Lawrence Malloy, a supporter of Georgia Democratic gubernatorial nominee Stacey Abrams, shows off socks adorned with an image of Abrams outside the site of a midterm election night party in Atlanta, Georgia, U.S., November 6, 2018. REUTERS/Leah Millis TPX IMAGES OF THE DAY
Supporters await the arrival of U.S. House Minority Leader Nancy Pelosi at a Democratic U.S. midterm election night party in Washington, U.S. November 6, 2018. REUTERS/Jonathan Ernst TPX IMAGES OF THE DAY
U.S. House Minority Leader Nancy Pelosi reads results of the U.S. midterm elections as she talks to an aide backstage at a Democratic election night rally and party in Washington, U.S. November 6, 2018. REUTERS/Jonathan Ernst TPX IMAGES OF THE DAY
Bobby Mines waves an American flag outside a polling place in Chapmanville, West Virginia, U.S. November 6, 2018. REUTERS/Lexi Browning TPX IMAGES OF THE DAY
Voters cast their midterm election ballots at the Santa Ana Methodist Church in Santa Ana, California, U.S. November 6, 2018. REUTERS/Kyle Grillot TPX IMAGES OF THE DAY
U.S. Democratic Congressional candidate Deb Haaland, who is trying to become the first Native American woman in the U.S. House of Representatives, hugs Dottie Tiger at a Native Vote Celebration on midterm elections night in Albuquerque, New Mexico, U.S., November 6, 2018. REUTERS/Brian Snyder TPX IMAGES OF THE DAY
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This is especially true since the results — Democrats winning the House and the GOP holding the Senate — came in as expected. Analysts say the likelihood of gridlock with a divided Congress is a neutral result for stocks and likely has little impact.

But Trump has for weeks claimed that a Democratic victory in the midterms would be negative for stocks and increased focus on the market in the run up to Election Day.

Following the midterms, Trump has doubled down on arguing that there is no reason for investigations into possible connections between the president's campaign and Russia. He has also reiterated his tax returns shouldn't be released

But the biggest political problem for markets may not be Democrats, but rather a problem of Trump's own making. Continued pressure from the president's trade war and the possibility that the conflict could escalate has been cited as analysts as one of the biggest threats to the market's continued growth.

"This trade issue is clearly the wild card for both the global economy and investing," David Kelly, chief global strategist at JPMorgan Funds, wrote in a note to clients.

He added: "If 2019 brings with it a major escalation in the trade conflict with China, with no resolution in sight, it would be a significant negative for global stocks and US stocks and could lead to a higher dollar and lower interest rates."

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SEE ALSO: Now it's full steam ahead for Trump's trade war with China

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