Stock Market Hesitant As Trump Prepares Tariffs
New tariffs enacted by Donald Trump should impact the stock market in a negative way, but how severely and for how long?
The US stock market is preparing to open for Tuesday after a holiday on Monday, and the stock market could move slowly as new tariffs come down the line from the new President.
US President Donald Trump has promised to impose new and stronger tariffs on China, Mexico, and Canada. How these will affect the stock market remains to be seen, but the Dow, S&P 500, and Nasdaq Composite were all up on Friday ahead of Trump’s swearing in.
The Nasdaq rose by 1.51% with tech stocks doing particularly well. The Dow Jones climbed 0.78%, and the S&P 500 gained 1%. All of this occurred Friday before the market closed, and we have yet to see what the market will look like once it opens for trading on Tuesday. Analysts are expecting a slow moving market that is trying to make sense of how the new tariffs will affect the economy.
Asian stock markets climbed slightly on Tuesday, as they opened first. The new tariffs do not seem to be affecting business as usual there, but it may take a while for them to go into effect and have a trickle down reaction in China and the surrounding markets.
Australian market ASX 200 closed with a 0.6% gain. The South Korean Kospi market stayed unchanged. Hong Kong’s Hang Seng market climbed 0.9%, and the Japanese Nikkei 225 climbed 0.3%.
What to Expect from the Market This Week
About one hundred executive orders were planned for the initial phase of Trump’s presidency. Many of those have already rolled out, and others will be enacted and take effect shortly. They will impact the stock market as Trump attempts to right the economic ship as he sees it.
Several currencies already dropped precipitously, including Mexico’s and Canada’s. The US dollar may be next, despite Trump’s best intentions.
We do anticipate some blowback on the US stock market as trading begins on Tuesday. It is too early to tell how the new orders will play out and have their impact on the indices. The best case scenario, and probably what Trump’s cabinet is hoping for, is that the initial impact will cause a market trajectory that will be downward and small and then recover quickly and shoot upward.
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