How Trump Changed the Narrative Around Tariffs and Sent Stocks to New Records
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Trump changed the market’s narrative on trade policy this week, easing fears weighing on investors.
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The president has shifted investors’ focus to his growth agenda.
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A slew of executive actions and announcements helped propel the S&P 500 higher. Fresh records.
President Donald Trump flipped the script on one of the biggest market concerns about his presidency this week — with his plan to spend massive amounts of money. Tariff Concerns over imports — and trade policy — have temporarily faded, sending stocks to new record highs.
The week’s developments mark a major shift in the market narrative, as traders fret over months of potential inflation from Trump’s tariff plan.
At the beginning of January the shares were sold and Bond products Trump is listed in reports that he is considering using his emergency powers to bring in tariffs early in his presidency.
The message was clear: The market believed tariffs would keep inflation at bay, dashing hopes that interest rates would stay low for longer and that accommodative monetary policy would extend the bull market into a third year.
But Trump’s orders in the first days of his presidency appear to have turned that narrative on its head, with markets this week finding high hopes for economic growth over the next four years.
Stocks have soared since Trump’s inauguration, where the president promised tariffs would bring “huge amounts of money” into the United States.
of S&P 500 It closed higher on Thursday, recovering from a sell-off earlier in the year as traders met more orders and policy announcements from the White House.
“Investors are now focused on, OK, the executive orders are coming in, he’s going to have to get serious, he’s going to get tax cuts,” Nancy Tengler, chief investment officer at Laffer Tengler Investments, told Business Insider.
“These are important things for the market, because – whether you agree with it or not, that’s not the issue at all. The issue is the uncertainty. And so it looks like we’re going to have a normal business order and things are going. To hug together,” she added.
The bond market seems to have recovered some of its losses as well. The product on 10 year US Treasury It has slipped slightly this week, but is down about 20 points from its peak earlier in the month. After hovering around 5% a few weeks ago, the yield was hovering around 4.6% on Friday, a level historically seen as an opportunity to sell in stocks.