Declining Nasdaq May Get a Boost as Trump Tariffs Declared Illegal
Stocks are dipping this week already but could see some turn around if Trump's tariffs are declared illegal.
Quick overview
- The Nasdaq Composite is down 1.15% as the market opens following a holiday weekend, with potential for recovery if Trump's tariffs are deemed illegal.
- The U.S. Court of Appeals ruled that Trump's tariffs were enacted unlawfully, but the ruling won't take effect until October 14th, allowing for an appeal.
- Investor sentiment may improve as the market anticipates the possibility of tariff rollbacks, despite a bearish start to September with all major indices down.
- A potential Federal Reserve interest rate cut could further influence market conditions positively if confirmed alongside news of tariff repeals.
The Nasdaq Composite is down 1.15% as the market opens after the long holiday weekend, but we could see an upward shift for the markets if President Donald Trump’s tariffs are declared illegal.
Over the holiday weekend, the United States Federal Court of Appeals ruled 7-4 that Trump was not legally allowed to invoke the national emergency law to enact his wide-ranging tariffs. However, the ruling will not take effect until October 14th, and that leaves room for Trump to file an appeal of his own.
Trump is confident the ruling will be overturned. Until then, investor sentiment may climb as the stock market anticipates the rolling back of some or all of the tariffs.
Stocks Trend Down with Bearish End to August
The S&P 500 index is also down, having lost 0.64% from the previous day. Tech stocks performed particularly poorly on that index, with Dell (DELL) leading the bearish trend with a loss of 8.88% and Oracle (ORCL) and Super Micro Computers (SMCI) both down more than 5% each on Friday. These stocks all continued to drop as the market opened on Tuesday after the extended weekend.
The Dow Jones Industrial Average is down 1.24% on Tuesday morning, continuing Friday’s dip and marking a slow start to September. With all three indices trending low, investors may hold off on making too many moves until they start to see some positive news.
The stock market indices all gained during August, with the S&P 500 adding 2%. The Dow Jones added about 3%, and the Nasdaq Composite climbed 2.5% for August. These numbers might be more promising, however, if it were not for the fact that September tends to be a tough month for stock markets. We usually see a downward trend throughout the month with losses across the board. The volatility of the stock market this year as tariff fears ebbed and flowed could mean that a poor showing in September will have a much harsher impact on the rest of the year than it usually does.
Investors should look out for the possibility of a new Fed interest rate cut in the coming weeks, which could help the situation dramatically, as well as news that Trump’s tariffs will be repealed. If both of these are confirmed in September, we could end up with a historically high month instead of the expected doldrum.
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