Wall Street’s main indexes held firm this afternoon as concerns over President Donald Trump’s latest tariff threats were tempered by growing optimism around renewed trade negotiations.
On Monday night, Mr Trump warned that steep new U.S. tariffs targeting countries from Japan and South Korea to smaller trade partners would take effect from August 1. However, he signalled flexibility, suggesting the deadline could be delayed if nations present new proposals.
In a sign of diplomatic movement, Japan’s chief trade negotiator, Ryosei Akazawa, held a 40-minute call with U.S. Commerce Secretary Howard Lutnick, during which both sides agreed to “actively” continue discussions.
By mid-afternoon, the Dow Jones Industrial Average was down 0.2%, the S&P 500 remained flat, and the Nasdaq Composite edged up 0.2%.
Market sentiment has stabilised significantly since Monday’s initial sell-off, which followed Trump’s tariff announcement and pushed major indexes sharply lower.
“The market’s taking comfort from the fact that the can has been kicked further down the road, and the expectation remains that the bark is a lot worse than the bite,” said Ben Laidler, head of equity strategy at Bradesco BBI.
The market’s relatively quick rebound stands in contrast to the sharp downturn seen three months ago following Trump’s “liberation day” tariffs, which plunged the Nasdaq into bear market territory and triggered corrections in both the Dow and S&P 500.
