Stock Market Momentum Finally Dying Down after Tariff Pause
The stock market is showing sings of slowdown after last week's tariff announcements are fading away to be replaced by other economic news.
Quick overview
- President Trump's pause on tariffs led to a significant rise in the stock market last week.
- However, the market has since declined slightly, with the Nasdaq, S&P 500, and Dow Jones all experiencing losses.
- The stock market had seen strong gains since the tariff announcement, but remains fragile and sensitive to further tariff news.
- Investors are advised to be cautious, as the situation with tariffs could change rapidly, impacting market stability.
The sky-high tariffs issued by President Trump were mostly put on pause on Wednesday last week, and that caused the stock market to soar.
The gas from Wednesday’s pause on tariffs has finally run out for the stock market, causing a slight decline in all three major indices. The Nasdaq Composite felt pressure from declining Nvidia stock as the Nasdaq fell 0.05% compared to the previous day. The S&P 500 lost 0.17%, and the Dow Jones dropped by 0.38%.
The stock market indices had been climbing dramatically since Wednesday’s announcement, buoyed by an announcement on Friday that many electronics would be exempted from tariffs. Adding that to the 90-day pause on most tariffs, and the stock market had room to breathe again.
Since the 9th, the S&P 500 has gained almost 400 points. The Dow Jones added about 2,300 points since that same date, and the Nasdaq added about 1,300 points. These have been some of the market’s strongest gains in years, following right on the heels of some of its deepest losses.
A Fragile Market
The tumultuous ups and downs of the stock market lately has created a fragile trading environment. Now, any tariff announcement is enough to drive the markets as a whole either up or down quickly. News related to the jobs market, inflation, and other key factors has not had quite as much impact lately, but tariff news is incredibly impactful to the market for now.
Investors should be very careful about betting big on any stocks that have not weathered the economic storms lately. They might be in for a surprise as soon as Trump changes his mind again about what to do with tariffs. For now, there is a 90-day reprieve on most tariffs from the United States to other countries, and many of the U.S.’s trade partners have responded well and eased off on their own tariffs. But that situation could change at any time, as this year’s trade war has already proven.
There are still many tariffs still in effect, including all of those that were issued before Trump came into office. Later today, the March retail sales report will be out, which could help move the stock market slightly and help indicate in which direction inflation is headed.
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