President Trump announced a delay in imposing 50% tariffs on European Union imports until July 9, providing temporary relief to the stock market. The S&P 500 snapped a four-session losing streak and surged above its 10-day moving average in higher volume, reflecting renewed optimism among investors. Tesla was among the notable performers, as it cleared a key entry point, contributing to the broader market’s gains.
Restaurant stocks also thrived, indicating a diversified recovery across different sectors. Market analysts are closely watching Nvidia’s upcoming earnings report, with the chipmaker being a significant player in the artificial intelligence space. Its performance is expected to have broader implications for the tech sector and the market as a whole.
Investor sentiment was further lifted by positive developments in other sectors, including notable gains in retail and technology stocks. The delay in the imposition of tariffs and positive movement in key stocks like Tesla played a substantial role in driving the stock market upwards on Tuesday. The market will continue to focus on upcoming earnings reports and broader economic indicators as traders and investors navigate the current economic landscape.
However, the president’s decision to escalate his global trade war on Friday appeared curious and costly. It capped off a week that saw Mr. Trump ignore repeated warnings that his agenda could worsen the nation’s debt, harm many of his own voters, and contribute far less in growth than the White House contends.
Since taking office, Mr.
Trump delays EU tariffs
Trump has raced to enact his economic vision, aiming to pair generous tax cuts with sweeping deregulation that he says will expand America’s economy.
He has fashioned his steep, worldwide tariffs as a political cudgel that will raise money, encourage more domestic manufacturing, and improve U.S. trade relationships. But for many of his signature policies to succeed, Mr. Trump will have to prove investors wrong, particularly those who lend money to the government by buying its debt.
So far, bond markets are not buying his approach. Where Mr. Trump sees a “golden age” of growth, investors see an agenda that comes with more debt, higher borrowing costs, inflation, and an economic slowdown.
Despite the potential economic benefits, a political backlash over the secrecy of the talks and worries over environmental, health, and labor standards sank the Transatlantic Trade and Investment Partnership (TTIP) between the U.S. and the European Union. The contentious investor-to-state dispute settlement mechanism heightened tensions by giving disproportionate power to multinationals in challenging European rules. Even with a symbolic agreement on U.S. standards for car safety or dropping tariffs on ethanol, the EU remains wary.
“It was a bad deal the first time around. They rolled over us and they would do it again,” an EU diplomat said. The mood is one of pervasive fatalism that the U.S. will not prove an honest broker, making a far-reaching trade deal between the EU and Trump highly unlikely.
