Markets had a muted response to new tariffs, suggesting investors might be discounting the effects they could have on inflation and the economy. Markets had a muted response to new tariffs, suggesting investors might be discounting the effects they could have on inflation and the economy.
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U.S. President Donald Trump announced Tuesday that copper and pharmaceutical imports will face tariffs of 50% and as high as 200%, respectively.
Following the news, the S&P 500, which hit multiple record closes last week, ground to a halt and closed mostly flat.
That said, it’s a muted response for such hefty tariffs, suggesting investors are either brushing off Trump’s tariffs as hollow threats, or discounting the effects they could have on inflation and the economy.
Such complacency could be a mistake, as some market watchers have cautioned. It also mirrors the White House’s stance on tariffs, which might not be a position investors want to take.
On Tuesday, Stephen Miran, chairman of Trump’s Council of Economic Advisers, told CNBC’s “Squawk Box” that the odds of tariffs leading to higher prices is a “rare event” like “pandemics or, or meteors or whatever.”
“I don’t mean to be dismissive,” Miran clarified. “All I mean to say is that prediction is difficult, and we should always speak in terms of odds and possibilities.”
For the record, there’s a 0.004% chance of an asteroid that will fly near Earth in 2023 striking our planet, according to NBC News.
What you need to know today
New tariffs on copper and pharmaceuticals. Copper imports will attract a 50% duty while that of pharmaceuticals will be subject to tariffs as high as 200%, Trump said Tuesday. He didn’t specify when they would take effect, but said the latter might kick in within a year and half.
U.S. stocks were mostly unchanged. On Tuesday, the S&P 500Nasdaq Compositeclosed around the flatline, while the Dow Jones Industrial AverageStoxx Europe 600dipping in the afternoon.
Elon Musk lashes out at Tesla bull. Wedbush Securities’ Dan Ives, who is perhaps the analyst most bullish on Teslathree recommendations to Tesla’s board, including “oversight” of Musk’s political activities. Musk retorted, “Shut up, Dan.”
Shein files for Hong Kong IPO. The online fast fashion giant’s confidential filing submitted last week is a bid to apply pressure on U.K. regulators to move forward its London listing ambitions, according to the Financial Times.
[PRO] Markets are refusing to listen to Trump. The latest tariff announcements from the White House have so far elicited a muted response from U.S. markets. Some market observers are concerned that investors are being too optimistic.
And finally…
Global stock markets are calling Trump’s bluff on tariffs
On Monday, Trump slapped punitive tariff rates on 14 trading partners — but global markets are so far shrugging off the new policies. Asia-Pacific equity markets had a muted response, while European stock markets closed higher Tuesday.
Investors had already priced in the fact that many trade deals would not be reached before the July deadline, according to Toni Meadows, head of investment at London’s BRI Wealth Management — but he suggested that some investors may be being complacent.
— Jenni Reid and Chloe Taylor
