Stock Market Climbs ahead of Donald Trump’s Tariff Deadline
Stocks climbed on Wednesday before Donald Trump's deadline expires for responding to new tariffs.
Quick overview
- Donald Trump's tariff deadline expired, yet the stock market saw gains on Wednesday, with the Dow Jones up 0.18% and the Nasdaq rising 1.21%.
- Over 200 countries will face higher tariffs ranging from 10% to 50%, but negotiations for lower rates are still possible.
- Investors remain optimistic that Trump may lower tariffs as countries negotiate, contributing to the market's resilience.
- Notable stock performances included Apple rising 5% after a government deal, American Eagle Outfitters up 6.66%, and Tesla increasing by 3.62%.
Donald Trump’s deadline for responses to his new tariffs expired during the first minute of Thursday morning, and yet the stock market trended higher on Wednesday.
The Dow Jones added 0.18% on Wednesday, just before trading closed off, and the S&P 500 climbed 0.73% at the same time. The Nasdaq added the most on Wednesday, closing off the day with a gain of 1.21%.
Because the deadline has expired, more than 200 countries will be paying higher tariffs, and these range anywhere from 10% to 50%. The countries still have opportunity to negotiate with the U.S. over tariffs, and Trump has stated that he is open to talking about lowering tariffs with each country even weeks after the deadline has passed.
This could be why the market remains elevated despite the impending higher costs to suppliers, sellers, and manufacturers. Investors may simply assume that Trump will end up lowering a lot of these tariffs as soon as countries begin reaching out to him and negotiating for lower rates.
Trump’s ability to impose wide-ranging tariffs is directly tied to his emergency powers. He declared a state of emergency on April 2nd, claiming that economic practices and foreign trade policies have created an emergency for the U.S. economy. While this act is being challenged in court, for now, Trump has the ability to continue imposing new and higher tariffs as he sees fit.
Stock Prices Soar
The stock market indices retreated from their all-time highs earlier in the week, but by Wednesday we saw an advance back toward record breaking highs. Apple (APPL) shares jumped 5% after the company announced a deal with the U.S. government for the American market worth $100 billion.
American Eagle Outfitters (AEO) continues its upward movement. Despite some retreat earlier in the week, the stock was up 6.66% on Wednesday, a good sign that its bold marketing campaign is still paying off.
Even Tesla (TSLA) had a good day on the stock market, with an increase of 3.62%. The company has struggled to bring its stock value up due to declining sales and increasingly divisive political drama surrounding its CEO Elon Musk. Tesla is preparing to expand its automated taxi service to California after a mildly successful launch in Texas.
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