Tariff Talks Help Stock Market Inch Upward
The stock market indices have just about broke even so far this week, but Friday's trading could help push them to positive numbers.
Quick overview
- The stock market indices remained flat this week, with a slight uptick on Thursday due to a trade agreement between the U.S. and the U.K.
- The Dow Jones gained 0.1% for the week, while the Nasdaq Composite and S&P 500 experienced slight declines overall.
- Concerns over tariffs and stagnant interest rates are causing investors to be cautious, despite positive trade news.
- Analysts predict that without interest rate cuts, the economy may face recession, impacting market growth.
The stock market indices made little progress this week, overall coming out flat ahead of Friday’s trading session but closing high for the day Thursday.
The uptick in stock market indices for Thursday was due primarily to an announcement of a trade agreement between the United States and the United Kingdom, which could help to take some pressure off the stock market. There are also rumors swirling about talks between China and the United States, with the possibility that the U.S. will cut back its 145% tariffs on China to 80%.
The Dow Jones gained just 0.1% for the week so far and is up 0.62% before trading opens on Friday. The Nasdaq Composite dropped 0.3% overall for the week but gained 1.07% on Thursday. The S&P 500 dropped 0.4% this week so far and added 0.58% on Thursday.
All of this leads to the last day of trading for the week, which we expect to be decent with an upward swing that could bring the market indices out positive by the time Friday trading finishes. The good tariff news is promising for the markets and should help propel them to an overall positive standing by week’s end.
What Is Holding Back the Stock Market?
With news of a deal between the U.K. and the U.S., the stock market should be doing very well, but there are still a number of issues that are keeping the market from climbing as quickly as it could.
The topmost of these is the tariff problem, and the 90-day reprieve that President Trump has issued for tariffs has many investors worried. Will Trump unpause the tariffs early? What will happen to the market once the pause is over and tariffs resume? These questions have investors playing cautiously with the stock market for now.
Investors also have to deal with the stagnating interest rate, which the Fed refused to cut in its recent meeting. Some analysts have predicted that as long as those cuts do not happen, the economy could head toward recession. For those looking to the Fed to counteract what Trump is doing with the tariffs, there was some disappointment this week, and the Federal Reserve is still planning two cuts this year. One of those is scheduled for the summer and the other just before the end of the year. The Fed has hesitated to issue new cuts while the inflation rate is still high, and these sticking points have kept the stock market from gaining as much as it could have been.
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