Wall Street Rallies, Shrugging Off New Tariff Threats from White House.
Investors focus on strong corporate earnings and expected Fed rate cuts, even as the President signals new levies on semiconductors, pharmaceuticals, and Indian goods.
NEW YORK – U.S. stock markets climbed higher in morning trading Tuesday, with major indexes approaching record highs as investors appeared to discount a fresh wave of trade tariff threats from the White House.
Buoyed by a strong corporate earnings season and growing confidence in future interest-rate cuts from the Federal Reserve, the S&P 500 and Nasdaq Composite showed resilience in the face of escalating trade rhetoric. The positive market movement, which also saw the dollar and Treasury yields gain, suggests investors believe corporate America is weathering the ongoing trade disputes.
The optimism came despite President Trump announcing early Tuesday that he plans to unveil new tariffs on semiconductors and pharmaceuticals “within the next week or so.” The president suggested import taxes on drugs could be phased in but might eventually reach a staggering 250%.
The administration also continued its pressure campaign on other trading partners. With a Thursday deadline for other tariff implementations looming, the Swiss president reportedly rushed to Washington D.C. to negotiate a deal to avert a punishing 39% rate on Swiss goods.
Furthermore, President Trump signaled a potential escalation in the trade conflict with India over its ties to Russia, stating he was likely to raise existing tariff plans on Indian goods “very substantially over the next 24 hours” from the planned 25%.
In other White House news, the president confirmed he was considering four candidates to chair the Federal Reserve, including economists Kevin Hassett and Kevin Warsh. He specified that Treasury Secretary Scott Bessent was no longer in the running for the top central bank position.
