Wall Street Hovers Near Record, Traders Weigh Trump’s Tariff Plans/ Newslooks/ WASHINGTON/ J. Mansour/ Morning Edition/ U.S. stock markets remain close to record highs despite investor uncertainty over President Trump’s proposed new tariffs on imports from Mexico, Europe, and Asia. Many traders speculate Trump might ultimately reduce or cancel the tariffs to avoid economic fallout. Global markets remain mixed, with upcoming inflation data and earnings reports poised to drive further volatility.
Wall Street Tariff Tensions Quick Looks
- S&P 500 remains near record highs despite tariff fears
- Trump threatens new 30% tariffs on Mexico and EU goods
- Markets speculate Trump may back off harsh tariff measures
- Economic risks of tariffs include potential U.S. recession
- Inflation report, earnings season could shake markets this week
- JPMorgan, Johnson & Johnson among key earnings due
- Global stocks mixed amid trade uncertainty
- Treasury yields steady as bond market watches inflation
- Crypto surges as Bitcoin hits new record highs
- Chinese exports jump amid looming trade deadlines
Deep Look
Wall Street Near Record Highs as Investors Eye Trump’s Tariff Moves and Economic Risks
NEW YORK — Wall Street hovered near its all-time peaks on Monday as traders weighed the potential fallout from President Donald Trump’s latest tariff threats while speculating he might ultimately avoid fully implementing them.
The S&P 500 inched up 0.1%, leaving it within 0.3% of its record high set just last Thursday. The Dow Jones Industrial Average rose by 35 points, or 0.1%, as of mid-morning trading, while the Nasdaq composite added 0.2%.
Markets React Cautiously to Tariff Rhetoric
The cautious optimism followed Trump’s weekend announcement that he plans to impose 30% tariffs on goods imported from Mexico and the European Union, set to begin August 1. The announcement adds to last week’s planned updated tax rates for imports from Japan, South Korea, and roughly a dozen other nations.
Investors remain jittery about the potential damage to global trade flows if the tariffs materialize. However, many believe Trump’s approach may be more of a negotiating tactic aimed at extracting trade concessions rather than a firm commitment to broad trade barriers.
“We believe the administration is using this latest round of tariff escalation to maximize its negotiating leverage and that it will ultimately de-escalate,” said Ulrike Hoffmann-Burchardi, global head of equities at UBS Global Wealth Management. “Especially if there is a new bout of heightened bond and stock market volatility.”
Potential Economic Consequences
Economists warn that fully enacting the proposed tariffs on August 1 could sharply increase the risk of a U.S. recession. Higher tariffs could raise prices on imported goods, pressure U.S. consumers and businesses, and dampen trade flows. The strain on the broader economy could also exacerbate concerns over the growing federal deficit, which ballooned following Trump’s sweeping tax cuts.
“That’s probably why the market might not like the tariff talk, but it’s not panicking about it either,” said Brian Jacobsen, chief economist at Annex Wealth Management. “There are always many conditions and clauses that can get these rates reduced.”
For now, the uncertainty is keeping traders cautious, with analysts warning that the market’s lofty levels could face turbulence if trade tensions flare.
Upcoming Economic Flashpoints
Several critical events loom this week that could further influence market direction. On Tuesday, investors will scrutinize the latest inflation reading, which economists expect to show that consumer prices rose to an annual rate of 2.6% in June, up from 2.4% in May.
A hotter-than-expected inflation print could fuel concerns that the Federal Reserve may maintain higher interest rates for longer, pressuring both stocks and bonds.
In addition, earnings season is kicking into gear. Major financial institutions, including JPMorgan Chase, will report quarterly results on Tuesday. Johnson & Johnson follows on Wednesday, and PepsiCo is scheduled to release its earnings on Thursday.
Corporate News Moves Stocks
A handful of corporate developments shaped Monday’s trading session. Fastenal, a distributor of industrial and construction supplies, reported stronger-than-expected profits, sending its shares up 2.7%. However, executives cautioned that broader market conditions remain sluggish.
Kenvue shares edged 0.5% higher despite news that CEO Thibaut Mongon is stepping down amid an ongoing strategic review. The former Johnson & Johnson division, known for consumer staples like Listerine and Band-Aids, is considering ways to streamline operations.
Conversely, Waters Corporation saw its stock plunge 11% after announcing plans to merge with Becton, Dickinson and Co.’s biosciences and diagnostic solutions business in a deal valued at approximately $17.5 billion.
Global Markets Mixed
Stock indexes abroad painted a mixed picture. European markets were broadly lower, with Germany’s DAX slipping 0.5% and France’s CAC 40 down 0.4%. However, markets rose 0.8% in South Korea and 0.3% in Hong Kong.
In China, stock indexes advanced after government data showed a surge in exports, driven partly by companies rushing shipments ahead of the August 1 deadline for potential new trade barriers between Beijing and Washington.
Treasuries Steady, Crypto Surges
Treasury yields were relatively stable on Monday. The 10-year Treasury note yield ticked up slightly to 4.44% from 4.43% late Friday as investors awaited inflation data.
Meanwhile, cryptocurrency markets saw significant action. Bitcoin extended its recent rally, reaching new record highs as Washington gears up for “Crypto Week.” Lawmakers are set to debate several legislative proposals aimed at solidifying the United States’ role as a global leader in digital assets.
Market Poised for Volatility
With markets perched close to record levels, traders remain vigilant. Much hinges on the coming days, as inflation data, corporate earnings, and the ongoing tariff saga could dictate whether Wall Street continues climbing—or faces the kind of turbulence many fear.
As Trump’s trade strategy evolves, the stakes for the economy and financial markets remain as high as ever.
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