Wall Street Rises as Stock Markets Worldwide Take Trump’s New Tariffs in Stride
The U.S. stock market experienced a rise on Thursday, with President Donald Trump’s latest tariffs kicking into effect on numerous countries. The S&P 500 increased by 0.5% in early trading, positioning itself just below its record set last month. The Dow Jones Industrial Average climbed 254 points while the Nasdaq composite rose by 0.8%.
Despite lingering worries that Trump’s tariffs could harm the economy, especially after a worse-than-expected job market report last week, there is optimism on Wall Street. Anticipation of potential interest rate cuts by the Federal Reserve and a succession of stronger-than-expected profit reports have overshadowed concerns for the time being. Lower interest rates can spur economic growth and boost investment prices, although they can also lead to higher inflation.
In an effort to support the sluggish U.K. economy, the Bank of England decreased its main interest rate on Thursday.
The U.S. tariffs, enacted Thursday morning, were already widely anticipated and were lower than Trump initially threatened. Some countries continue to negotiate for lower tax rates on their exports. Amidst ongoing uncertainties about global trade policies, criticism looms that the U.S. stock market’s rapid ascent since April has resulted in inflated prices.
Recent U.S. economic reports presented a mixed picture, maintaining relative stability in Treasury yields within the bond market. One report indicated a slight increase in unemployment benefit applications last week, suggesting potential rising layoffs. However, the number remains within its usual range.
“These are not nearly recession readings,” according to Carl Weinberg, chief economist at High Frequency Economics.
A separate report noted that U.S. workers’ productivity improved more than economists expected during the spring. This could help mitigate pressure on inflation, especially as Trump’s tariffs might lead to higher prices for a wide range of goods and services.
On Wall Street, Apple played a pivotal role in the market’s rise amid hopes that its vast size could help it adapt to the changing economic landscape shaped by Trump’s policies. Apple’s stock rose by 1.8% after CEO Tim Cook announced at the White House alongside Trump that the company would increase its U.S. manufacturing investment by another $100 billion over four years.
In notable individual performances, DoorDash’s stock climbed 7.3% after surpassing Wall Street’s profit expectations in the latest quarter by attracting new customers and increasing total orders. Similarly, Duolingo saw a significant surge, soaring 31.3% following exceptional financial results, with subscription revenue growing by 46% compared to the same period last year.
These gains helped mitigate declines in other sectors. Eli Lilly’s stock suffered an 11% drop despite reporting stronger profits than analysts predicted. Investors were reportedly underwhelmed with the results provided for the late-stage study of orforglipron, a potential pill version of the popular weight-loss drug Zepbound.
Intel experienced a slight 1.2% downturn after Trump criticized its CEO and called for his resignation without providing evidence of any misconduct.
Globally, stock indexes saw an upward trend across parts of Europe and Asia. In Shanghai, stocks increased by 0.2% and rose by 0.7% in Hong Kong following China’s report of an uptick in exports for July. This surge was bolstered by businesses capitalizing on a temporary reprieve in Trump’s tariff war with Beijing.
Japan’s Nikkei 225 advanced by 0.6%. Within the Japanese market, Toyota Motor’s stock fell due to revised full-year earnings forecasts impacted by Trump’s tariffs. Conversely, Sony’s stock rose upon indications of lesser-than-expected damage from the tariffs.
The bond market saw stability with the 10-year Treasury yield remaining at 4.22%, the same level as late Wednesday.
As the global market environment continues to navigate the complexities of international trade policies, investors remain cautious while adjusting to rapid changes. While economic uncertainties persist, encouraging company earnings and strategic investments play crucial roles in stabilizing and driving growth in stock markets worldwide.
