Can't Shake 'Em Off: Wall Street Ain't Phased by Trump's Tariff Shock Waves
Increased U.S. Tariffs are Not Light on the Financial Giants of Wall Street
Wall Street's seen more tariffs than a Georgia pecan farm, and don't let Trump's latest announcements rattle your portfolio. Even though the markets had a wobbly start, they're back to their upbeat ways. The trader crew on the Street's tossing about habituation effects like a hot potato. Hell, there's a new term floating around: TACO, Trump Always Chickens Out1.
In the latest round of US tariff hikes, Wall Street's seemingly learned to dance with the devil. The Dow-Jones Index is pumping up, conquering 42,305 points, while the S&P-500's soaring by 0.4% and the Nasdaq Composite ain't far behind, tracking a 0.7% gain[3]. Some 1,264 stocks gained, 1,487 lost ground, but fear not, 79 remained untouched on the NYSE[3].
The ol' trade war dance ain't over; both the US and China are still flingin' mud at each other[3]. Trump announced doubling tariffs on steel and aluminum imports to a whopping 50%, effective June 4th[3]. It's like a modern-day Western, but instead of gunslingers, you got central bankers nervously gripping their economic forecasts.
Jim Reid, market strategist at Deutsche Bank, reckons it's impossible to keep up with the trade game these days. He says that with Trump in the saddle, the uncertainty's likely to run deep, even if we've probably seen the peak of US policy aggression[3].
The news of the day was a mixed bag[3]: ISM reported that the US industry slowed down in May, but the S&P Global survey showed a strengthening compared to the previous month.
A proposed retaliatory measure in a tax law by Trump gave some folks the jitters. The idea is to slap a 20% tax on foreigners with US investments, affecting governments, individuals, and companies with US branches[3]. It's being dubbed a 'revenge tax,' and it could cut demand for certain US assets, putting pressure on the dollar[3].
Buck Buck, Dollar Funk
The revengin' tax could take a bite out of the dollar, according to Barclays[3]. Result? The dollar index dropped by 0.7%, with traders mainly attributing the weakness to resurfacing trade issues[3].
What about the piddlin' question of a US default? US Treasury Secretary Scott Bessent snuffed that idea out. Investors shed their US bonds, yield on ten-year US Treasury notes increased by 4 basis points to 4.45%[3]. One thing's sure: the US's astronomical debt's got investors biting their nails[3].
Some call gold the ultimate safe haven, and with the dollar sliding and geopolitical tensions on the rise, it's no surprise the precious metal's enjoying a 2.8% boost, pushing the value of a troy ounce to $3,381[3].
News from Russia sent oil prices flying, with Brent and WTI reducing by up to 3.8%[3]. The OPEC+ agreed to boost production from July, a move markets expected and already priced in[3].
Steel Stocks are the Real Goldmine
The US tariffs on steel and aluminum imports left some stocks gleamin' like newly polished chrome. Cleveland-Cliffs gained a whopping 23.7%, while Steel Dynamics and Nucor pocketed a 10.3 and 10.1% increase respectively[3].
BioNTech shares are somehow managing to outshine even gold, with a 18.1% spike[3]. Mainz-based BioNTech has inked a pact with Bristol Myers Squibb worth billions to develop "BNT327," an antibody candidate[3].
The UK takeover panel's extended the deadline for US chipmaker Qualcomm's takeover bid for Alphawave IP Group for the fourth time[3]. Campbell's beefed up its third-quarter results, but spilled some pessimistic vibes, causing its shares to pick up a 0.7% gain[3].
[3]: ntv.de, toh/DJ
- The Commission, with an eye on the ongoing trade war between the US and China, is monitoring the financial implications of President Trump's tariff announcements on businesses and the overall economy, given the potential impact on general-news.
- Despite the proposed 'revenge tax' by Trump on foreigners with US investments, finance experts predict that it may put pressure on the dollar and certain US assets, but they also see opportunities for investment in steel stocks, especially in the context of tariff hikes on steel and aluminum imports, which may benefit companies like Cleveland-Cliffs.
