Wall Street Volatility Rises Amid New Tariffs and Retaliation/ Newslooks/ WASHINGTON/ J. Mansour/ Morning Edition/ U.S. stocks fluctuated wildly as Trump’s escalating trade war triggered global retaliation. The S&P 500 and Dow Jones swung between gains and losses, while AI stocks surged. The Federal Reserve welcomed cooling inflation, but concerns over tariffs and economic uncertainty remain.
Wall Street Reacts to Trade War: Quick Looks
- Stock Market Rollercoaster: The S&P 500 and Dow Jones swung sharply, reflecting uncertainty over tariffs and inflation.
- Trump’s Tariffs Take Effect: The U.S. imposed 25% tariffs on steel and aluminum, triggering immediate retaliation from the EU and Canada.
- European Counter-Tariffs Hit U.S. Brands: Harley-Davidson and Jack Daniel’s plunged as the EU targeted bourbon and motorcycles.
- Federal Reserve Gets Some Relief: Cooling inflation helped calm fears of interest rate hikes, but tariff concerns kept markets on edge.
- AI Stocks Bounce Back: Nvidia, Tesla, and other AI-driven companies rebounded, reversing recent sell-offs.
- Consumer Spending Uncertainty: Delta Airlines warned of weaker demand, while Casey’s General Stores reported strong earnings.
- Treasury Yields Climb: Bond markets signaled growing concern over economic turbulence and trade uncertainty.
- Wall Street Braces for More Trade War Twists: Investors fear more tariff swings from Trump, which could worsen economic volatility.
Deep Look: Wall Street’s Wild Swings Amid Trump’s Trade War
Stocks Whipsaw as Global Trade War Intensifies
Wall Street continued its volatile streak Wednesday, with stocks rising, falling, and rising again as investors reacted to Trump’s latest tariff escalation and global retaliation.
- The S&P 500 jumped 1.3% early, then erased gains, then climbed again, closing up 0.6%.
- The Dow Jones fluctuated by over 700 points, briefly falling into the red before stabilizing.
- The Nasdaq Composite held steady, buoyed by big tech and AI stocks.
“Markets are struggling to find direction because there’s no consistency in trade policy,” said one Wall Street analyst.
Trump’s Tariffs and Global Retaliation Spark Market Jitters
- Canada retaliated with $29.8 billion in counter-tariffs, hitting U.S. electronics and sports goods.
- The European Union targeted U.S. brands, imposing tariffs on bourbon, motorcycles, and other American exports.
- Markets fear a prolonged trade standoff, which could increase costs for businesses and consumers.
“We deeply regret this measure,” said EU President Ursula von der Leyen. “Tariffs are bad for business and worse for consumers.”
Consumer Brands Take a Hit, AI Stocks Surge
While AI stocks rebounded, companies affected by tariffs took a sharp hit:
- Jack Daniel’s parent company Brown-Forman fell 6.9%.
- Harley-Davidson slid 5.6%, as European tariffs threatened its global sales.
- Delta Airlines dropped 2.9%, citing weakened demand for last-minute bookings.
- Casey’s General Stores rose 6.2%, reporting strong profits from fuel and food sales.
Meanwhile, AI-related stocks surged, reversing recent losses:
- Nvidia climbed 6.5%, cutting its 2025 losses to 13.7%.
- Tesla gained 7.7%, posting its first back-to-back gains in a month.
- Super Micro Computer and GE Vernova saw significant gains, fueled by AI expansion.
Fed Sees Inflation Relief, But Trade War Looms Large
Wall Street welcomed a better-than-expected inflation report, which eased pressure on the Federal Reserve to hike interest rates.
- Cooling inflation reassured investors, reducing fears of a Fed rate hike.
- However, Trump’s trade policies could push inflation back up, making Fed policy decisions more complicated.
“We’re seeing economic uncertainty that could impact Fed policy for the rest of the year,” analysts warned.
What’s Next? Wall Street Braces for More Tariff Twists
The biggest concern for markets is the uncertainty surrounding Trump’s trade moves:
- On Tuesday, Trump threatened to double Canadian tariffs, then backed off.
- Future tariff hikes could further rattle markets, increasing costs for businesses and consumers.
- Wall Street is watching for potential trade talks, but analysts aren’t optimistic.
“The market needs stability, but right now we have anything but that,” a strategist warned.
With economic uncertainty rising, Wall Street investors remain on high alert, expecting more twists and turns in Trump’s trade war.
You must Register or Login to post a comment.