Trump's Tariff Deadline Sends S&P 500 Down 0.07%

President Trump has reaffirmed his commitment to the August 1 tariff deadline, sending letters to emphasize that tariffs will commence on the specified date without any extensions. This firm stance has contributed to a continued downward trend in the stock market, with the S&P 500 experiencing a slight dip of 0.07% on Tuesday. The market's reaction to Trump's tariff announcements has been one of caution, as investors brace for potential disruptions in trade relations.

Trump's decision to double down on the tariff deadline has added to the uncertainty in the market, with stocks falling on Monday as the president began posting letters outlining the tariff rates for various trading partners. The letters have heightened concerns about a return to tariff turmoil. The president's insistence on the August 1 deadline, with no extensions granted, has further fueled market volatility.

The impact of Trump's tariff announcements has been felt beyond the stock market, with oil prices and bond yields also experiencing fluctuations. The president's decision to impose 25% tariffs on various trading partners has added to the market's unease, as investors assess the potential implications for global trade and economic growth. The EU, meanwhile, has been pushing for a trade deal with the U.S. despite the looming tariff threat, potentially involving exemptions for key sectors and a pledge to address trade imbalances.

Trump’s second term in office has been an economic rollercoaster, with stocks falling dramatically after his Liberation Day tariff announcement in April before recovering after he backed off from the steep demands. But even as markets ticked back up, the original extension of July 9 remained as a ticking time bomb. And while Trump signed an executive order on Monday to push the deadline once again to Aug. 1, it wasn’t enough to calm investors.

The imminent reciprocal tariffs are not the only expected economic policy from the White House this week, with White House Press Secretary and Treasury Secretary telling that it was going to be a “busy couple of days.” On Tuesday, Trump announced a new 50% tariff on copper, though he did not set a date that it would go into effect. To date, the White House has only hammered out deals with Britain and Vietnam, and an expected deal with India remains uncertain.

While markets remain jumpy, Trump continues to put pressure on Federal Reserve Chair. On Tuesday, Trump told reporters that should “resign immediately,” once again criticizing the central banker’s decision not to lower interest rates. , however, has cited the potential impact of tariffs on inflation as a reason the Fed has kept rates steady.

Despite the volatility, stocks have not fallen as sharply as they did in April when Trump first announced his tariffs campaign, sending markets into a downward spiral. And while his Tuesday post insisted that Aug. 1 would be the last chance for countries to negotiate, he has repeatedly moved the goalposts in the past.

One bright spot amid Tuesday’s sea of red was Tesla, which rose 1.33% on Tuesday despite CEO Elon Musk’s public spat with Trump. In a new note on Tuesday morning, analyst wrote that Tesla has reached a “tipping point,” calling for the board to end the “soap opera.” One of his recommendations was for Musk to reduce his work, including his recent campaign to create a new political party.

After posted his demands, Musk issued a brief reply: “Shut up, Dan.”