Wall Street Holds Firm Despite Trump’s Latest Tariff Hikes

Wall Street held relatively firm following President Donald Trump’s latest tariff escalation and after the Federal Reserve hinted that interest rates may not change for a while, Stan Choe reported for the Associated Press (AP).

The S&P 500 edged up by less than 0.1%, the Dow Jones Industrial Average added 123 points, or 0.3%, while the Nasdaq Composite slipped 0.4%. I Photo: Michael Daddino Flickr

The S&P 500 remained virtually unchanged, edging up by less than 0.1% in the market’s first trading session since Trump announced 25% tariffs on all foreign steel and aluminum entering the country.

The Dow Jones Industrial Average added 123 points, or 0.3%, while the Nasdaq Composite slipped 0.4%.

The movements were modest not only for U.S. stocks but also in the bond market, where Treasury yields rose only slightly. The threat of a potential trade war remains very real, with significant economic stakes.

Most of Wall Street agrees that substantial and sustained tariffs would increase prices for U.S. households and ultimately cause significant disruptions in financial markets worldwide. European Commission President Ursula von der Leyen stated.

“Unjustified tariffs on the EU will not go unanswered — they will trigger firm and proportionate countermeasures.”

However, trading remained mostly calm, partly because Trump has previously demonstrated a willingness to retract such threats.

He did so earlier with the 25% tariffs he had announced on all imports from Canada and Mexico, suggesting that tariffs may serve as a negotiating tactic rather than a long-term policy.

This has led much of Wall Street to believe that the worst-case scenario may not materialize.

“The metal tariffs may serve as negotiating leverage,” said Solita Marcelli, chief investment officer for the Americas at UBS Global Wealth Management.

Meanwhile, much of Wall Street’s attention on Tuesday shifted to a different development in Washington. Federal Reserve Chair Jerome Powell reiterated in testimony on Capitol Hill that the Fed is in no rush to lower interest rates further, as reported by Matt Ott and Zen Soo for AP.