“Liberation Day” Holds Back the Stock Market
The U.S. stock market wavered on Tuesday and continued to struggle during Wednesday’s opening hours as investors fear what will happen during Donald Trump’s “Liberation Day”.
Trump has announced that Wednesday will mark a day of liberation for the United States as he prepares to roll out more tariffs, aimed mostly at countries that are already taxing the U.S. His reciprocal tariffs have investors worried and many of them are hesitant to put money down on stocks when the market is so low.
On Wednesday, the stock market opened with mixed results, with the Dow Jones down 0.03% and the Nasdaq Composite up 0.87%. The S&P 500 added 0.38%, but most analysts do not expect the minor gains to remain for long. Once Trump unveils his new tariffs, that could be bad news for the stock market.
Stocks are being hit on a few sides right now. The recent economic data is not very hopeful, with inflation still high and no new interest rate cuts taking place at the last Fed meeting. Key stocks like Tesla and Nvidia continue to plummet, denoting a weak economy that could be headed for recession.
What More Tariffs Could Mean for the Market
There is no doubt that Trump will have more tariffs to issue later today, but what exactly those will entail remains to be seen. The hard truth for investors is that even if Trump goes easy on countries with his reciprocal tariffs, he will still be causing harm to the stock market with any kind of tariffs.
We have seen the impact that the trade war has had on the stock market so far. From February 1st, Trump enacted tariffs on several countries, although he had warned they were coming from the day he took office. That started the cycle of fear that the market is in now, with the Nasdaq dropping sharply since February 20th.
What we expect when these new tariffs are announced today is that the market will take another hit. And then, when the tariffs go into effect, there could be another powerful impact to the market.
We do expect the market to recover somewhat over time, especially if the tariffs are not as severe as feared. If Trump has a plan for economic recovery beyond tariffs, then that could help if he were to unveil that. For now, we only anticipate market decline, and the stocks have not hit bottom yet.
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