Financial markets in Wall Street exhibit a subtle drift, echoing a measured response from global stock markets, following President Trump's declaration of fresh tariffs.
In the world of economics, the ongoing trade tensions under President Trump's tariffs have been a subject of much debate. Worries about these tariffs damaging the economy are high, particularly after last week's worse-than-expected report on the job market.
The S&P 500 edged down by 5.06 points to 6,340.00, reflecting some uncertainty in the stock market amid these trade tensions. However, it's important to note that the stock market has shown complex reactions amid these trade tensions.
Economic analyses suggest that the tariffs have had a mixed and mostly negative impact on the U.S. economy. U.S. real GDP growth is estimated to be reduced by about 0.5 percentage points in 2025 and 2026, with a persistent long-run economic size reduction of roughly 0.4% due to tariffs in force as of 2025. The unemployment rate is projected to rise by 0.3 percentage points by the end of 2025 and increase by 0.7 percentage points by the end of 2026, with payroll employment lower by about 505,000 jobs by the end of 2025.
Sectoral effects have been uneven, with U.S. manufacturing output expanding by 2.1% due to protective tariffs, but this gain is offset by declines in other sectors such as construction contracting by 3.6% and agriculture by 0.8%. Tariffs have raised large revenues, estimated at $2.7 trillion over 2026–2035, but with negative dynamic revenue effects reducing this by $475 billion, resulting in net dynamic revenues of $2.2 trillion due to changed economic behavior and slower growth.
Despite initial fears of instability due to tariff-related trade tensions, the stock market has continued to rise or remain resilient. This apparent contradiction is partly attributed to investor expectations of future tariff adjustments, negotiated trade deals with some countries, and other factors supporting market confidence despite trade uncertainties.
However, U.S. consumers and businesses are estimated to bear about 75% of the tariff costs, contradicting claims that foreign countries would absorb the tariffs, implying reduced consumer purchasing power and higher input costs for U.S. companies, which could weigh on the market longer-term.
Meanwhile, in the corporate world, DoorDash's stock increased by 5% after it surpassed Wall Street's profit expectations for the latest quarter. On the other hand, Eli Lilly dropped 14.1% due to disappointing results for a late-stage study of its potential pill version of the popular weight-loss drug Zepbound.
In the global market, President Trump's tariffs, taking effect on dozens of countries, had only a muted effect on markets worldwide. Stock markets abroad, including Europe and Asia, rose. Japan's Nikkei 225 rose 0.6%, but Toyota Motor's stock fell due to reduced full-year earnings forecasts because of Trump's tariffs.
In the bond market, the yield on the 10-year Treasury rose to 4.23%. Duolingo's stock jumped 13.7% after it reported a 46% growth in subscription revenue for the same period last year.
President Trump's call for the resignation of Intel's CEO, accusing him of being "highly CONFLICTED," though he gave no evidence, added another layer of uncertainty to the economic landscape.
In summary, Trump's tariffs have slowed U.S. economic growth, increased unemployment, shifted sectoral output unevenly, raised government revenue, and imposed costs largely borne by American consumers and firms. The stock market’s performance amid this has been surprisingly stable but reflects complex dynamics including tariff uncertainty, negotiations, and broader economic conditions.
- Tariffs under President Trump have sparked debates in the world of economics, with concerns about potential damage to the economy being high, especially after a worse-than-expected job market report.
- The S&P 500 showed some uncertainty in the stock market amid these trade tensions, edging down by 5.06 points to 6,340.00.
- Economic analyses suggest that the tariffs have had a mostly negative impact on the U.S. economy, reducing real GDP growth by about 0.5 percentage points in 2025 and 2026, and increasing the unemployment rate by 0.3 percentage points by the end of 2025.
- The stock market has continued to rise or remain resilient despite initial fears of instability due to tariff-related trade tensions, attributed in part to investor expectations of future tariff adjustments and negotiated trade deals.
- U.S. consumers and businesses are estimated to bear about 75% of the tariff costs, contradicting claims that foreign countries would absorb the tariffs, which could potentially weigh on the market long-term.
- In the corporate world, issues such as a CEO's resignation call by President Trump and the performance of stocks like DoorDash and Eli Lilly in the stock market highlight the complex intersection of business, politics, and finance in the general-news landscape.
