This is how political and geopolitical events impact markets

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To gain an edge in any market, you need to have a good understanding of the factors that influence price movements in it. For the sake of structure and convenience, it is recommended to sort those factors into different categories. Markets can be moved by a wide range of economic, political, technological, social, and even cultural influences. Political influences, in particular, are quite potent in moving markets since they tend to have a drastic effect. These are just a few prominent examples of such an effect.

Statements from politicians

Nearly everyone in the investment environment has experienced the impact of tweets published by former president of the United States, Donald Trump, on markets. When he commented that the dollar was too strong, markets responded, and the dollar plummeted. When he announced that he would impose tariffs on $300 billions worth of Chinese imports, market participants also responded by selling different assets.

An analysis of several thousands of his tweets showed that they do move markets, albeit on the short term. In other words, if you are a short-term trader, or investor, you need to pay attention to tweets by key figures today (not Trump, as he is no longer on Twitter), and assess how those tweets can potentially impact your portfolio.

Most brokers offer trading platforms that also present recent important events in a built-in tool, including statements from key figures, so that you can easily tweak your trading strategy accordingly.

Key elections and referendums

Elections generally have a considerable impact on the markets. Analysts usually say that the first year after a new American president is elected tends to be weak for stocks, since the new president feels safe in his position. According to this theory, markets do recover afterwards and peak in the third year.