Donald Trump claimed credit for the recent rally in cryptocurrencies and stocks, coinciding with new record highs on Wall Street.
Impact of Tariffs on Markets
Trump stated in a post on Truth Social: 'Tech Stocks, Industrial Stocks, & NASDAQ HIT ALL-TIME, RECORD HIGHS! CRYPTO, ‘Through the Roof!’ NVIDIA IS UP 47% SINCE Trump Tariffs. USA is taking in Hundreds of Billions in Tariffs. COUNTRY is now ‘BACK.’'
According to CNBC, the Dow Jones surged by 217 points (0.5%), S&P 500 rose by 0.2%, and the Nasdaq Composite set a new record right after opening.
Countries' Reactions to Trump's Tariffs
Trump imposed a 50% tariff on Brazil, partially as a response to legal proceedings against former Brazilian president Jair Bolsonaro. Brazilian President Luiz Inacio Lula da Silva stated that Brazil would take action using its economic reciprocity law. Markets responded immediately as the iShares MSCI Brazil ETF (EWZ) dropped by 2%.
Trump had already sent letters detailing new tariffs to at least seven other countries, with additional letters sent to leaders of 14 nations, including Japan and South Korea, to take effect on August 1.
Employment and Inflation Questions
The Labor Department reported that initial unemployment claims fell by 5,000 to 227,000, exceeding Dow Jones estimates. However, continuing claims rose to 1.96 million, the highest level since November 2021.
Bank of America warned of potential inflation increases related to tariffs. Economist Stephen Juneau noted: 'We expect inflation to accelerate over the coming months in large part due to tariff-related price increases.'
Despite the rise in stocks and cryptocurrencies following new tariffs, analysts express concerns over inflation and long-term unemployment.
