Trump’s Tariffs Push Wall Street to Its Limits, but Markets Stay Strong — For Now

Wall Street is holding steady despite President Donald Trump’s latest round of tariffs, which took effect Thursday and raised US import taxes to their highest level since the 1930s.

The move marks a shift from earlier this year, when Trump’s “Liberation Day” tariffs sent global markets tumbling. This time, stocks closed higher for the week, with the Nasdaq reaching a record high and the S&P 500 posting its best week in over a month. Analysts caution, however, that the economic effects of tariffs often take weeks or months to materialize.

“He is succeeding in implementing major tariffs without shocking the stock market,” said Ethan Harris, former head of global economics at Bank of America. Still, Harris warned the tariffs could cause “real damage” over time.

Part of the market’s resilience comes from carveouts that shield major companies from some import taxes. Apple, for example, avoided tariffs on certain products due to commitments to US manufacturing, sending its stock up 13% last week — its best performance since 2020.

Another factor buoying investor confidence is enthusiasm over the artificial intelligence sector, with strong earnings from companies like Nvidia and Meta. In addition, US trading partners have largely refrained from retaliatory measures, avoiding a broader trade war.

Market watchers also point to the “Trump put” — the belief that if stocks do plunge, the president will adjust his approach to stabilize markets before resuming his tariff agenda.

Despite this optimism, economists warn markets may be “too complacent.” They are closely watching upcoming inflation and labor market data for signs of tariff-related economic strain.

“By no means are we out of the woods,” said Arun Sai, senior multi-asset strategist at Pictet Asset Management. “We are priced for nothing to go wrong, and yet we still have a very important inflection point ahead of us.”

Credit: CNN Newsource

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