Wait…

We’ve seen this playbook before.

Trump makes a bold claim → the stock market sinks → and within days to weeks… we rebound to new highs.

The latest “bold claim” happened yesterday.

At 1:00 a.m. ET on Tuesday, Trump posted this image on Truth Social:

He also posted another image showing Greenland, Canada, and Venezuela shaded with a U.S. flag:

Markets didn’t love it.

Stocks sank Tuesday as investors priced in volatility.

• S&P 500: Down 143 points (-2.06%)

• Nasdaq: Down 561 points (-2.39%)

• Dow: Down 871 points (-1.76%)

Honestly, I don’t know how this keeps happening.

But it does.

And as investors we can take advantage of this pattern.

The Trump Shock Playbook

It looks like this:

Headline shock → risk-off selling → panic takes over → dip buyers step in → we recover → new highs.

We’ve seen it repeatedly.

Example #1: The “Mother of All Bombs” (MOAB) – April 2017

On April 13, 2017, the U.S. dropped the MOAB in Afghanistan on an ISIS tunnel complex.

Markets dipped on the initial shock, then stabilized quickly once it became clear the event wasn’t spiraling into a broader conflict.

Example #2: “Fire and Fury” – August 2017

When Trump warned North Korea of “fire and fury,” markets immediately got jittery.

The S&P 500 fell, and the VIX spiked 44%.

And then?

The market moved on.

New highs were reached in early September.

Example #3: The China Trade War Tweet – August 2019

On August 23, 2019, Trump posted that American companies were “hereby ordered” to look for alternatives to China.

The Dow dropped 623 points (2.4%), the S&P 500 fell 2.6%, and the Nasdaq dropped 3%.

Fear hit first.

Then rationality returned.

New highs were reached in October.

Now fast forward to this term.

This isn’t just ancient market history. It’s happening in real time.

Example #4: Remarks on Taiwan and Chip Protection – July 2024

In a July 2024 interview, Trump reignited Taiwan tensions by suggesting it should pay more for U.S. defense.

Chip stocks sold off, TSMC slid 17%, and the Nasdaq pulled back over 10% as investors priced in geopolitical risk.

The market eventually stabilized once it became clear there was no immediate policy action.

The market staged a “V-shaped” recovery – hitting new highs in September.

Example #5: “Liberation Day” Tariff Shock – April 2025

Trump announced sweeping tariffs in early April 2025, and markets reacted violently.

The S&P 500 fell 4.8%, with the Dow dropping nearly 1,700 points, and the Nasdaq falling nearly 6%.

It was one of those “this could be the start of something bigger” moments.

And then we got the pause.

And the bounce.

And the recovery.

Same playbook.

So… Is This Time Different?

This is the question every investor is asking.

To date, the answer has always been no.

Not because the headlines aren’t serious.

Not because volatility can’t get worse.

But because at the end of the day, the market runs on a few unavoidable truths.

First, earnings are what matters.

• Annexing Greenland isn’t going to slow the AI buildout.

• People aren’t going to buy fewer iPhones because the U.S. picked up a “51st state.”

• And consumers aren’t going to cancel Prime, stop ordering packages, or pause cloud spending because of a geopolitical headline.

Second, Trump doesn’t want to tank the stock market.

He treats it like a scoreboard.

And with midterm elections on the horizon, sustained market weakness is the last thing he wants.

That doesn’t mean these moments can’t shake markets in the short term.

They absolutely can.

But these shakeouts are usually emotional first, fundamental second.

And that’s exactly why they’re so valuable for investors who know the playbook.

Headline shock → risk-off selling → panic takes over → dip buyers step in → we recover → new highs.

Yesterday was the risk-off selling.

Pretty soon we’ll hit new highs.

It happens every time.