Why Rocket Companies Stock Skyrocketed Today

Rocket Companies (NYSE: RKT) investors had quite a Friday to remember, as the mortgage specialist's shares leaped nearly 10% higher in price across that trading session. This was a top-down bounce, inspired by a proposed initiative at the highest levels of the U.S. federal government.

The Trump pump

No less a political figure than President Trump was behind the rally in Rocket and other real estate-adjacent stocks. Late afternoon Thursday, the President said he was pushing to directly boost the mortgage market.

Image source: Getty Images.

In a post on his preferred social media platform, Truth Social, he wrote that he was directing his officials to purchase $200 billion worth of mortgage-backed securities. This, he explained, "will drive Mortgage Rates DOWN, monthly payments DOWN, and make the cost of owning a home more affordable."

"It is one of my many steps in restoring Affordability," he added, addressing a concern about economic conditions that more than a few U.S. citizens have expressed recently.

Such a purchase would almost certainly have a positive impact on the mortgage market if implemented to the promised degree. Rocket is a prominent player in that industry.

Uncertainty principle

The key word there is "if." Trump tends to make grand promises that aren't always fully realized -- his administration's recent climb-downs on numerous aggressive tariffs is a vivid example of this. Given that, I wouldn't necessarily pile into the stocks of mortgage companies; rather, I think it's best to buy or sell them on the natural prospects of the industry and those of the individual businesses.

Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Rocket Companies. The Motley Fool has a disclosure policy.