Stocks Rally as Dow Surges 484 Points, Tariff Jitters Ease Despite Rising Economic Pressures

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U.S. stocks closed sharply higher Tuesday, with the Dow Jones Industrial Average vaulting 484 points, as investors looked past rising tariff pressures and focused on signs of resilience in corporate and consumer data.

The Dow Jones Industrial Average climbed 483.64 points, or 1.10%, to 44,458.7. The S&P 500 added 72.37 points, or 1.14%, to 6,445.82, while the Nasdaq Composite rose 296.50 points, or 1.39%, to 21,681.9. Gains were broad-based, with more than three-quarters of listed stocks advancing.

The advance came even as tariff tensions continued to simmer. J.P. Morgan Global Research said, in a recent note , the effective U.S. tariff rate now stands at 15.8%, up sharply from 2.3% at the end of 2024. The increase reflects recent moves by the Trump administration, including 50% tariffs on certain Brazilian and Canadian goods and a series of new trade agreements with the European Union and Japan that set rates below earlier threats.

“Our updated estimate of the average effective U.S. tariff rate stands at 15.8%,” said Nora Szentivanyi, senior global economist at J.P. Morgan. The firm expects the rate to approach 18–20% later this year, barring legal challenges to the administration’s use of the International Emergency Economic Powers Act.

Despite the policy headwinds, the equity rally suggested investors were positioning for continued growth, albeit uneven. Bank of America Institute reported that wage growth for lower-income households slowed to 1.3% year-over-year in July, while higher-income households saw a 3.2% increase, highlighting a widening gap in consumer income dynamics.

Energy and commodity markets were more subdued. Gold futures for December delivery eased 0.14% to $3,400.00 an ounce, while crude oil for September delivery slid 1.17% to $63.21 a barrel, reflecting mixed sentiment on global demand.

Market breadth favored the bulls, with more than 87% of S&P 500 components closing above their 200-day moving averages. “While tariffs remain a concern, the absence of immediate retaliation from major trading partners and stronger-than-expected earnings have supported the rally,” said one senior trader at a New York investment firm.

Investors now turn their attention to upcoming retail sales data and corporate earnings later this week, which could offer clues on whether the market’s momentum can hold in the face of trade-policy uncertainty and growing income disparities.