Wall Street's Outlook Shines Bright on Trump's Tariff Strategy
Donald Trump's presidency started with a slew of executive orders, but he's taking his time on the announced tariffs, leaving investors delightful. The Dow Jones, Nasdaq, and S&P 500 all saw gains on Tuesday, with the Dow hitting 44,025 points, the Nasdaq at 19,756 points, and the S&P 500 at 6,049 points. This positive sentiment stems from investors' expectations that the proposed tariffs may not be as severe as initially assumed.
According to Dan Boardman-Weston, CEO of wealth manager BRI, "Trump's main goal is to do deals, and that's what he's trying to do with his tariffs." This perspective suggests that if negotiating parties can strike a compromise with the President, tariffs might not be as punitive as anticipated. Originally, investors had anticipated Trump to enforce the announced import tariffs immediately after his inauguration. However, Trump announced February 1 as a potential date for imposing 25% tariffs on imports from Mexico and Canada.
The threat of tariffs sent currencies like the Mexican peso and the Canadian dollar tumbling, while the Dollar Index witnessed a rise. On the other hand, stocks related to the energy sector saw significant gains. Companies specializing in nuclear power, like Nuscale, Oklo, and Nano, saw their shares soar by upwards of 30%. Oil producers, such as Schlumberger and Kinder Morgan, also experienced gains of up to three percent. Trump's declaration of a national emergency to boost energy production appears to be behind these surges.
The pharmaceutical chain, Walgreens Boots Alliance, has been in the spotlight due to a lawsuit filed by the U.S. Justice Department. The lawsuit alleges that the company knowingly dispensed prescriptions for addictive painkillers without a legitimate medical purpose, resulting in a significant decline in its stock price. Despite this, Moderna saw a stock boost after the U.S. government announced a subsidy for its bird flu vaccine development.
Intel's shares also went up, having gained nearly nine percent on Friday and another one percent on this occasion. Sources suggest that an anonymous company is considering buying Intel outright or at least making a significant investment. British bank HSBC's update of Intel's stock recommendation also contributed to the positive sentiment among investors.
This brief overview highlights the fluctuating impact of Trump's energy policy and tariff proposals on the stock market and individual companies.
After the announcement of a potential tariff date on February 1, investors are monitoring Wall Street closely to see how Trump's negotiations with Mexico and Canada will affect the tariffs. Furthermore, entrepreneurs in the energy sector have been capitalizing on Trump's declaration of a national emergency to boost energy production, with companies like Nuscale and Schlumberger seeing significant gains.
