Trump Sparks Panic: Argentine ADRs and Bonds Crash 8%
Dollar bonds, which had been trading in positive territory before the Trump-Milei meeting, also sank more than 7%.
Quick overview
- U.S. President Trump warned that financial aid to Argentina would be conditional on Javier Milei winning the upcoming elections.
- Following Trump's comments, Argentine assets experienced significant volatility, with stocks and bonds sharply declining.
- The S&P Merval index closed down 2.1%, while Argentine ADRs on Wall Street fell by as much as 8.1%.
- Market participants interpreted Trump's remarks as a signal of uncertainty regarding future U.S. support for Argentina.
The U.S. president warned on Tuesday that his country would not be “generous” with Argentina if Milei loses the legislative elections. Markets reacted instantly: Argentine assets swung from gains to sharp losses without pause.
In another day defined by the extreme volatility that has recently characterized Argentine markets, dollar bonds and local stocks reversed course abruptly on Tuesday and tumbled more than 8%, after U.S. President Donald Trump made future financial aid to Argentina conditional on a Javier Milei election victory.
“If he (Milei) loses, we are not going to be generous with Argentina,” Trump said at a White House press conference alongside Milei, just days after the U.S. agreed to provide a major financial rescue package to Argentina. Trump also attacked Milei’s opposition, calling it part of the “far-left movement” he blames for the country’s economic crisis. “He may not win, but I think he will. And if he wins, we’ll stick with him. And if he doesn’t win, we’re out,” he added.
Uncertainty and Conditions
Although several market participants believe Trump was referring to the 2027 presidential elections—not the upcoming October 26 midterms (many traders were expecting another “saving tweet” from Bessent)—his remarks immediately rattled Argentine assets, which had been rallying on the back of the assistance program announced by Treasury Secretary Scott Bessent. That program includes a $20 billion currency swap with the Central Bank (BCRA) and direct U.S. Treasury intervention in the FX market—an unprecedented move that had brought some calm to local markets. As a result, the S&P Merval erased early gains and closed down 2.1% after Trump’s comments.
Argentinian Stocks and Bonds
On Wall Street, Argentine ADRs plunged as much as 8.1%, led by Grupo Supervielle. The rest of the top five losers were Vista Energy (-7.8%), Transportadora de Gas del Sur (-6.7%), Central Puerto (-6.5%), and Grupo Financiero Galicia (-6%).
Dollar bonds, which had been trading in positive territory before the Trump-Milei meeting, also sank more than 7%. The biggest drops came from Bonar 2035 (-7.2%), Bonar 2041 (-7%), and Bonar 2028 (-6.6%). Although not yet officially confirmed, the country risk index (EMBI+) climbed back above 1,000 basis points following the widespread sell-off in sovereign bonds.
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