US equities cratered early Thursday. This decrease came after a major recovery due to President Donald Trump’s surprise announcement that he was canceling his planned tariffs. The new effective tariff rate currently tops out at 30.5% during this provocative pause, alarming policymakers both inside and outside the investment community. The Nasdaq Composite tanked more than 4%. At the same time, the S&P 500 dropped more than 3.5%, erasing plenty of par gains of greater than 8% and 5% respectively earned only one day prior. In contrast, the Dow Jones Industrial Average fell 5%, receding from the prior day’s historic advance.
The surprise announcement from Trump, posted on Twitter on Wednesday, would temporarily delay tariffs for 90 days. This development coincided with the European Union’s decision to suspend 25% retaliatory tariffs against US imports, a move aimed at stabilizing trade relations.
During a congressional hearing, US Trade Representative Jamieson Greer faced scrutiny from Nevada Representative Steven Horsford, who questioned whether the tariff suspension constituted market manipulation. When asked about such a drastic change, Greer quickly shot back “No.” This response deepened fears among policymakers about what the pause on federal student loan payments meant.
In the months following this announcement, US inflation fell to 2.4% by March. While the decline is slight, it’s still a cause for hope on the path to widespread economic stability. The question mark on Trump’s tariff strategy has many scratching their heads about the long-term effects.
“This was brilliantly executed by @realDonaldTrump. Textbook, Art of the Deal.” – Bill Ackman
Yet billionaire hedge fund manager Bill Ackman called Trump’s manoeuvring “brilliant.” Politico reported on his comments, where he described it as a clever play that might reconfigure trade talks over the next 90 days. He stressed the importance of understanding among traders of their respective roles in an order-driven marketplace.
“Is that we now understand who are our preferred trading partners, and who the problems are. China has shown themselves to be a bad actor.” – Bill Ackman
While some financial analysts were optimistic about the move, many raised alarm over possible manipulation and what it might mean for the average American’s wallet. House Speaker Mike Johnson celebrates on social media. He framed Trump’s aggressive tactics as proof of “the Art of the Deal.”
Democratic leaders were not as excited over the announcement. Perhaps the most important moment was House Whip Katherine Clark’s advocacy for amazing enclaves. Just two hours before he tweeted his tariff pause, Trump was telling his Truth Social minions that it was “wonderful time to buy” in the stock market. She called this a shocking ethical breach.
“Two hours before announcing his tariff pause, Trump told his paid Truth Social subscribers it was ‘a great time to buy’ on the stock market. Corruption is the name of their game.” – Katherine Clark
Senate Minority Leader Chuck Schumer sternly rebuked Trump’s bizarre economic agenda. He likened their elimination to a game of “Red Light, Green Light.” I was impressed by how he focused on the fact that, on the surface, these games sound pretty silly. Yet, they have the most profound effects on American families.
“He thinks he’s playing Red Light, Green Light with the economy… But it is very real for American families.” – Chuck Schumer
Schumer highlighted concerns that anyone made money off stock trades based on advance knowledge of what Trump was announcing. He testified that Congress needs to take a deeper look at these transactions.
“Did anyone buy or sell stocks, and profit at the public’s expense? I’m writing to the White House – the public has a right to know.” – Chuck Schumer
Her congresswoman Alexandria Ocasio-Cortez righteously went to the mat for more transparency on insider trading within Congress. She further reminded participants that the deadline to disclose, May 15th, is fast approaching.
“Disclosure deadline is May 15th. We’re about to learn a few things. It’s time to ban insider trading in Congress.” – Alexandria Ocasio-Cortez
During the unusual, contentious debate and stock price tumble, Amazon CEO Andy Jassy took a public stand against the move. He pointed out how dramatically the tariffs would hurt consumers. He acknowledged that the firm is still assessing the effect of these more sweeping alterations. Consequently, third-party sellers could be forced to increase prices for consumers.
As this very fluid situation unfolds, investors, lawmakers, and economic analysts are watching closely as further developments will continue to shape next steps. Yet it is precisely this unpredictable behavior of Trump’s tariff policy that shapes the arcane dynamic behind the stock market. Millions more are wondering in what direction the economy might go over the next few weeks.