U.S. stocks held steady Monday, suggesting Wall Street is growing more immune to tariff threats from President Donald Trump, who over the weekend pledged to impose new levies on imports from the European Union and Mexico.
The Dow Jones Industrial Average was flat midday. The S&P 500 hovered near unchanged, and the Nasdaq Composite inched up 0.25 percent.
Trump announced Saturday that thirty percent tariffs on goods from the EU and Mexico will take effect August 1. But both blocs have signaled a willingness to continue negotiations, leading investors to discount the likelihood of a drawn-out trade conflict. On Thursday, Trump announced Canadian goods not exempt under an existing trade agreement would be subject to a 35 percent tariff.
Rather than reacting sharply to the new tariff plans, markets appear to have accepted that higher tariffs are now inevitable and not a drag on the U.S. economy. Tariffs have not pushed consumer prices higher and other countries have not reacted to the latest announcements with retaliatory tariffs, likely easing concerns among investors about the economic impact of the tariffs.
This week also brings new inflation data, which could influence expectations for interest rate policy . Investors are watching to see whether price pressures are easing despite the imposition of earlier rounds of tariffs.
Tensions between the White House and the Federal Reserve also remain in view. On Sunday, National Economic Council Director Kevin Hassett told ABC News that President Trump could remove Fed Chair Jerome Powell “if there’s cause.” Administration officials are scrutinizing the renovation costs of the Fed’s main building in Washington, D.C., while the president has continued to criticize Powell over the central bank’s refusal to cut interest rates.
Despite finishing last week in the red, the major indexes remain near record levels. Monday’s muted reaction suggests that investors have learned not to panic as new tariff rates are announced. Stocks have soared since selling off after the Trump administration’s Liberation Day tariff announcement in April, with the S&P rising 25 percent, rewarding investors who bought or held stocks following the announcement. The S&P rose 5.9 percent in June and is up three percent since Trump took office. Stocks are 9.3 percent higher than they were a week before the 2024 election.
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