All eyes on Trump vs China in trade war over tariffs
Wall Street posted solid gains Friday as big banks kicked off first-quarter earnings and investors closed the book on a turbulent week of wild swings driven by the turbulence of the trade war started by the Trump Administration. The volatility began early in the week but improved by week’s end as the S&P showed its highest gain since November 2023, field by a selloff in longer-term Treasuries and the dollar abated. The S&P jumped 2% Friday.
More than 80 countries have requested meetings with the Trump Administration to negotiate reciprocal trade and tariff deals. As a result, Trump has paused tariffs for 90-days while an escalation with China has taken front stage. According to NewsMax, “JPMorgan Chase, Morgan Stanley and Wells Fargo all reported better-than-expected profits, but warnings of a potential economic slowdown due to trade disputes dampened enthusiasm for the sector. Analysts currently expect aggregate S&P 500 earnings growth of 8.0% for the first three months of the year, less optimistic than the 12.2% growth predicted at the beginning of the quarter, according to LSEG data.”
Tariffs applied against the United States far outweigh Trump’s threatened 10%-25% tariffs he threatened in response. Such a bold move is what has forced so many countries to suddenly desire a new deal. However, with China, is in a possible game of chicken with each country upping the ante with Trump at 104% and China boosting their tariff to 125%. This coming week proved to be quite the continuing saga, as Trump’s first months in office are anything but boring.