Tariff Tensions: Wall Street's Rocky Start to the Week

Money Explainers

8/7/2025

Follow the latest developments impacting global trade and markets.
See how Trump's tariff announcements are influencing U.S. stocks.
Understand the economic implications of upcoming tariff deadlines.
#TradeDeals #StockMarket #TariffTalks

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00:00Wall Street is bracing for a highly anticipated week, as traders anxiously await announcements

00:06regarding the Trump administration's plans for tariffs. Monday opened with U.S. stocks broadly

00:11lower, reflecting the market's unease. By mid-morning, the Dow was down 300 points,

00:16a 0.6% drop, while the S&P 500 and the tech-heavy Nasdaq composite also fell by 0.6%

00:23and 0.7% respectively. The market is clearly digesting the Trump administration's intent.

00:30To announce new trade deals or, alternatively, notify countries of new tariff rates.

00:35President Donald Trump himself stated on Sunday that the White House would dispatch tariff letters

00:40to countries by Monday noon, detailing new rates set to go into effect on August 1.

00:46This comes as Trump's self-imposed July 9 deadline for trade deals approaches,

00:50marking the conclusion of a 90-day pause initiated on April 9.

00:55While U.S. stocks have rallied in recent weeks, fueled by investor optimism that the worst of

00:59the tariff confusion was over. The current uncertainty is prompting caution.

01:05Mohit Kumar, chief strategist and economist for Europe at Jefferies, believes the July 9 deadline

01:10WO1 have a material impact on markets but will create near-term uncertainty and prompt some

01:16profit-taking. He views the letters as an incentive for countries to swiftly agree to deals, anticipating

01:23more trade agreements in the coming weeks. Despite earlier rallies, with the S&P 500 notching for record

01:29highs since June 27 due to stronger-than-expected economic data, concerns are now re-emerging.

01:35Brian Belsky, chief investment strategist at BMO Capital Markets, previously noted that cooler than

01:41anticipated CPI numbers continue to suggest a muted tariff impact, for now, at least. He remains optimistic,

01:48expecting trade deals to provide more clarity for both investors and businesses, and likely keep the

01:54uptrend in stocks intact. Treasury Secretary Scott Besant echoed this sentiment, telling CNBC on Monday that he

02:01expects several announcements in the next 48 hours, and warning on CNN that tariff rates would boomerang

02:07higher on August 1 if deals are U.N. completed. However, not everyone on Wall Street shares this optimistic

02:13outlook. Scott Wren, global market strategist at Wells Fargo Investment Institute, cautions that the market consensus

02:20is overly optimistic on the tariff outlook. He expresses concern that as tariff rates settle,

02:26the economy could slow, leading to a pullback in consumer spending. Wren suggests that stocks are

02:32currently ahead of themselves and advises trimming positions in overvalued markets and sectors,

02:37specifically mentioning U.S. small-cap stocks and consumer discretionary sectors that have performed

02:42well recently, adding another layer of complexity. Trump also announced an additional 10% tariff

02:49on any countries aligning with BRICS, the economic bloc, comprising Brazil, Russia, India, China,

02:57and South Africa. Gold prices fell 0.8% and the U.S. dollar index gained 0.2% on Monday as investors

03:05shed safe havens. With the S&P 500 and NASDAQ at record highs, and the Dow close to its own all-time

03:12high, the market remains highly fluid and susceptible to rapid shifts based on tariff developments.

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