Trump’s Tariffs Rhetoric Simmers Down, but Wall Street Is Still Cautious

The market rallied yesterday after President Donald Trump clarified that he does not intend to fire Federal Reserve Chair Jerome Powell. He also made it clear that tariffs on China would come down and would not stay at 145%. Investors have speculated that tariffs will instead be at around 50-65%.

That early stock market rally did cool down significantly by the time the stock market closed. And today, stocks have gone up, but in a much more lukewarm way. This is despite Trump softening up on tariffs, as no negotiations are underway with China, and significant tariffs remain in place.

Here’s a market update as of 10:00 A.M (ET) today.

• The S&P 500 is up 39.55 points, or 0.74%.
• The Nasdaq Composite is up 219.3 points, or 1.31%.
• The Dow Jones Industrial Average is up 35.2 points, or 0.09%.

Trump Gets More “Passive” Regarding Tariffs

President Donald Trump said that tariffs on China would come down. The White House later said that tariffs would not be lowered without negotiations with China. In the meantime, Trump has warned that increased tariffs on Canadian cars are possible. He also said that “it’s okay” if the United States does not make a deal with China. He said that Jerome Powell was making errors by not lowering interest rates.

Trump will also be exempting carmakers from some U.S. tariffs and is considering exemptions for some Chinese auto parts. This is after two weeks of speculation that the president would pause tariffs on the automotive sector, just like he did with electronics.

The Chinese Commerce Ministry made some comments too:

• “Any content about China-US economic and trade negotiations is groundless and has no factual basis.”
• “If the US really wants to resolve the issue, it should lift all unilateral tariff measures against China.”
• “China and the US not yet in talks on tariffs.”

In the meantime, senior aides in the Trump administration have held high-level meetings on China’s restrictions on rare earth minerals. These restrictions could deeply hurt the U.S. economy once reserves run out.

Comments From the Fed’s Waller

The Fed’s Waller made the following comments:

• “We need better control of the budget deficit.”
• “Smaller tariffs will have a modest pass-through.”
• “It wouldn’t suprise me to see more layoffs and higher unemployment.”
• “Tariffs are part of most economic debates now.”

Earlier, the Fed’s Hammack made some comments:

• “The US economy is very resilient.”
• “The Fed will move quickly if it needs to.”
• “I am seeing good things in the hard data, but softer data is an issue.”
• “The Fed needs to be patient, it’s too soon to consider a move in May.”
• “We don’t know yet what uncertainty and trade policy will do to the economy.”
• “Uncertainty is really weighing on businesses and their planning.”

Macros

• US Initial Jobless Claims match forecast at 222,000.
• Continued Jobless Claims at 1.841 million vs. the 1.8685 million estimate.
• Durable Goods Orders come in at 9.2% vs. the 2% estimate.
• Existing Home Sales come in at 4.02 million vs. the 4.13 million estimate.
• Existing home Sales fell 5.9% vs. the 3.05% estimate. Slowest March sales pace since 2009.

Other Assets

• Gold is up 0.9% to $3,324.8/oz.
• Crude Oil Futures are up 0.93%.
• Natural Gas Futures are down 3.9%.
• Bitcoin is down 0.54% to $93,142.33.

The image featured at the top of this post is ©Openverse.