Trump’s upcoming statement – a bullish catalyst?

President Donald Trump hints at a major announcement, and JPMorgan advises investors to bet on an upside move if it sparks a market rally.

On Tuesday, during a meeting in the Oval Office with Canadian Prime Minister Mark Carney, the president revealed that he plans to make a “very, very big statement” before his trip to the Middle East next week.

“We’re going to make a very, very big statement – one of the biggest – and I won’t tell you exactly what it’s about,” he said, adding that it is “really, really positive” and “will be one of the most important statements in many years on a particular issue.”

In light of the upcoming announcement — which Trump said he will make “Thursday, Friday, or Monday before departure” — JPMorgan believes investors should buy call options on the S&P 500 index. These are contracts that give the holder the right to invest at a fixed price within a specified time frame.

“It’s worth hedging for short-term upside risk, especially given other important events next week, the potential for systematic strategies to increase exposure on upward movement, and the recent normalization of short-term implied volatility,” wrote Bram Kaplan, Head of U.S. Equity Derivatives Strategy at JPMorgan, in a Tuesday note.

Of course, investors should be cautious, as the topic of Trump’s statement remains unknown. In fact, the president clarified during the meeting that he’s “not necessarily saying it’s trade-related.” In that sense, “it may not impact markets,” Kaplan warned.

However, Kaplan noted there’s a chance that Tuesday’s hint resembles a previous situation where Trump announced a pause on high tariffs for most countries for 90 days. Just hours before that, markets recorded a historic rally after Trump posted on Truth Social: “NOW IS A GREAT TIME TO BUY!!!” Investors who listened then made significant profits.

“Next week we also have two major market-moving events: the May Fed meeting (May 7) and the **April inflation data release (May 13),” Kaplan continued. “If markets react positively to either of these, the upside move could be further amplified by CTA funds (trend-following hedge funds), since several key momentum signals sit near the ~5800 level on the S&P 500.”