Higher Stock Market Today Despite Tariff Worries
On Monday, the stock market climbed higher, with the Dow Jones up by 0.2% and the S&P 500 jumping 1.59%. This marks a positive shift from last week’s low numbers.
The Nasdaq Composite is the leading stock index today with an increase of 1.63% compared to the previous day, beating even the highs of the Dow and the S&P 500. These positive numbers are surprising considering that there are new tariffs to be levied against Canada and Mexico. The 30-day that President Donald Trump gave them as a reprieve from tariffs are over, but Trump has promised that the new tariffs will be fluid.
Imposing tariffs on important trading partners with the United States could prove to be bad business, as the fear of tariffs has already hurt the stock market over the past few weeks. New tariffs rates from Canada and Mexico could be lower than the 25% tariff imposed on China. The trade water between China and the U.S. has caused the price of some goods to spike, and there is no end in sight for this dispute.
The Bright Spots
There is some good news out of these tariff developments. Mexico has said they will impose tariffs on China as well that will match those from the United States, and this could ease any tariffs that the U.S. is preparing for Mexico. A united front like this has the potential to make Mexico a stronger trading partner, decrease shipping costs on imports, and create a new cooperation that pushes out Chinese influence on U.S. and Mexico policies.
Nvidia (NVDA) stock remains high at $123.65, more than double its position a year ago. Microsoft (MSFT) inched up closer to $400 with a 0.67% climb this week. These and other tech stocks have helped to keep the Nasdaq Composite high despite fears that a trade war with China would hurt tech imports more than other categories.
However, investors may want to pay attention to a recent quote from investing giant Warren Buffet. He said that to some degree, “Tariffs are an act of war.” They demonstrate that two countries are not on good terms with one another, and the Chinese are more likely to take offence at tariffs than many Western countries would. The long-term impact on inflation and the price of goods has yet to be seen, but buffet and other analysts are concerned about what these tariffs will do down the road.
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