Key Points
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There’s a temporary tariff exemption on electronics, but tariffs are expected to return in the form of a more specialized package.
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Trump said that there were no tariff exemptions on Monday and that fentanyl tariffs still apply.
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Citi downgraded the U.S. equities to neutral, but the market is still up due to the electronics tariff exemption.
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The stock market rose this morning after the Trump administration announced a “temporary” tariff exemption on consumer electronics. This decision exempts products like smartphones, laptops, semiconductors, and other electronics from the tariffs imposed on Chinese imports. It has provided relief to tech companies reliant on Chinese manufacturing, but there’s still plenty of fear.
That’s because these tariffs are temporary, and Commerce Secretary Howard Lutnick went on air to say that these tariffs will be reimposed later on in another tariff package. It’s simply a procedural adjustment, but the short-term relief is something the market is welcoming.
Here’s a market update as of 10:00 A.M (ET) today.
- The S&P 500 is up 62.89 points, or 1.17%.
- The Nasdaq Composite is up 225.01 points, or 1.34%.
- The Dow Jones Industrial Average is up 355.93 points, or 0.89%.
Tariff Reprieve and Recession Fears
On Friday, the Federal Reserve caused the markets to get slightly more optimistic as Boston Fed’s Susan Collins said it would “absolutely” step in if needed. Many thought there was a chance that the Fed would keep away from supporting the economy with quantitative easing during the current administration, but these fears have been mitigated by Collins’ statement.
As for the tariffs, Trump seems to be set on them. He said that there was no tariff exemption on Friday. “Nobody is getting off the hook for unfair trade.” Chips are to be assessed in national security probes, and the Trump administration is looking at chips and the “whole electronics supply chain.” He also said these products are still subject to the 20% “fentanyl tariffs.”
Citi downgraded U.S. equities to “neutral” from overweight due to all the uncertainty.
Tariff Negotiations
Trump has directed tariff talks to begin with South Korea, Japan, and India.
White House’s Hassett also said that progress has been made on tariff talks with the EU. He said he does not expect a recession and that rare earth limits are being studied carefully.
It is a good idea to take his words with a spoonful of salt, as there have been plenty of conflicting comments from him.
He said that tariffs would cause a drop in prices for the American consumer and also downplayed tariffs in late March by saying, “I think markets need to change their expectations because it’s not everybody that cheats us on trade; it’s just a few countries and those countries are going to be seeing some tariffs.”
“One of the things we see from markets is they’re expecting they’re going to be these really large tariffs on every single country.” Liberation Day tariffs ended up being much worse than market expectations.
The German economy ministry said that the effects of U.S. tariffs are not yet reflected in current economic indicators and that the risk of a global slowdown has increased considerably.
No critical macro figures are coming out today. It’s a boring day if you like data and the market is mainly focused on tariffs.
Other Assets
- Gold is down 0.7%.
- Crude Oil Futures are almost unchanged.
- Natural Gas Futures are up 2.6%.
- Bitcoin is up 0.94% to $84.480.
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