"Tariff Fatigue" on Wall Street as Trump's Latest Announcements Fails to Rile Markets
Increased U.S. Tariffs Spare the Wealthy Elites of Wall Street Unscathed
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It seems that Wall Street has developed a "tariff fatigue" when it comes to Donald Trump's announcements of new tariffs. The latest round of tariff hikes didn't cause a ripple on the stock market, with indices actually going up. Traders are chalking this up to a simple case of becoming accustomed to the president's way of doing things.
Despite the seemingly calm waters, the trade conflict between the US and China remains unresolved, with both sides constantly trading accusations of undermining recent trade deals. The peace between the US and China is hanging by a thread over the handling of rare earths.
Market strategist Jim Reid of Deutsche Bank noted: "It's really tough to keep up with what's happening in trade right now. For the moment, it seems like tariff uncertainty will persist, even if we've probably passed the peak of US policy aggression."
On the stock market front, the Dow Jones Index saw a slight increase of 0.1 percent to 42,305 points. The S&P-500 closed 0.4 percent higher, and the Nasdaq Composite was up by 0.7 percent. A total of 1,264 stocks gained ground on the NYSE, while 1,487 lost ground, with 79 remaining unchanged.
The economic data of the day presented a mixed picture, with industrial activity in the US slowing down in May but the S&P Global survey for the US industry showing a strengthening compared to the previous month.
The ongoing trade conflict drove demand for gold, with the troy ounce rising by 2.8 percent to $3,381, thanks to a weak dollar and increased uncertainty in the market.
Meanwhile, investors showed nervousness over a retaliatory measure against foreign governments contained in a tax law by US President Trump. The measure could reduce demand for some US assets and put pressure on the dollar[2].
On the bond market, the yield on ten-year US Treasury notes rose by 4 basis points to 4.45 percent, with investors selling US bonds despite US Treasury Secretary Scott Bessent ruling out a US default. However, the high level of debt raised concerns among investors[3].
The re-escalating trade conflict boosted demand for the supposedly safe haven of gold, supported by a weak dollar. Additionally, the Ukrainian military's large-scale attack on Russia's strategic bomber fleet raised new concerns about an end to the Ukraine war, further pushing up gold prices.
News from Russia also fueled oil prices, with both Brent and WTI prices rising by up to 3.8 percent. Furthermore, OPEC+ agreed over the weekend to increase production from July, which was already expected and reflected in prices.
Tariffs on steel and aluminum imports resulted in a surge for Cleveland-Cliffs shares, with the company seeing a 23.7 percent increase. Steel Dynamics and Nucor followed suit, with gains of 10.3 and 10.1 percent respectively.
Apple is in a legal battle with the EU competition authority over a decision requiring the company to make its iOS operating system more compatible with products from competing tech companies under the digital markets act[4].
Biontech shares soared by 18.1 percent after signing an agreement with Bristol Myers Squibb for the development and commercialization of its antibody candidate "BNT327". The deal is worth several billion dollars[5].
The UK takeover panel has extended the deadline for US chipmaker Qualcomm's takeover offer for Alphawave IP Group for the fourth time[6]. Campbell's, the ready-meal manufacturer, beat market expectations in the third quarter but issued a negative outlook, with its shares rising by 0.7 percent.
[1] MarketWatch
[2] CNBC
[3] Reuters
[4] Bloomberg
[5] Biontech Press Release
[6] City AM
The Commission may have to address the increasing tariffs and trade conflicts between the US and China, as the ongoing dispute has significant implications for global finance and general-news. For instance, the recent rise of gold prices can be attributed to market uncertainties caused by this trade conflict.
Politics and business continue to intertwine as the agreements reached between technology companies, such as the one between Biontech and Bristol Myers Squibb, are influenced by regulatory decisions made by organizations like the EU competition authority.
