In an interview with Reuters on May 18, Trump said that some tech companies are valued at billions of dollars — but have never made any money.
"You have a stock market that is very strange," he said in the interview.
That was when the S&P 500 lost nearly 50% of its value and the Dow Jones Industrial Average fell 20% from its October high of 14,015.
Trump isn't the first billionaire to warn against overvalued tech companies…
Microsoft Corp. (Nasdaq: MSFT) co-founder Bill Gates and venture capitalist and entrepreneur Mark Cuban have criticized what they call unicorns – private companies with weak fundamentals valued at over $1 billion, according to GeekWire.
Cuban also cited another reason for a stock market crash: Trump himself. Cuban told CNN on Monday he thinks with "100% certainty" that Trump will cause a big correction in the markets.
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On the other hand, U.S. Federal Reserve Chair Janet Yellen emphasized that the U.S. economy isn't in a bubble back in April. Other economic and investment experts tend to agree, citing that stock prices, while high, aren't near the extremes of the dot-com bubble in 1997-2000, according to CNN Money.
Typically, it takes several factors at the same time for the stock market to enter a serious decline. For example, 9/11 was a major contributing event to the dot-com bubble.
Modernly, some of these factors could include: the economy falling into a recession, a Fed policy blunder, or a commodity price crisis, according to CNN Money.
A Foreboding Trump Isn't New
This isn't the first time Trump has predicted a stock market crash or a tech bubble this year.
On April 15, Trump said that a stock market crash "will be coming" and that we're also in a big bubble. He also said that the United States was on track for a huge recession, according to CNN Money.
And back in October 2015, the presumptive Republican nominee echoed the same fears of a stock market bubble to The Hill.
On May 12, Money Morning's D.R. Barton, a 28-year technical trader and celebrated financial coach, told FOX Business viewers how a Trump versus a Clinton presidency would affect markets. Here's that full segment:
- CNN Money: Trump and Cruz Predict Stock Market 'Crash'
- GeekWire: Trump Warns of Tech Bubble, Says Current Market Is 'Very Strange'
- Reuters: Trump on North Korea, Wall Street Regulation, Tech Stocks
- OregonLive: Donald Trump's Election Would Crash the Stock Market, Mark Cuban Says