Stock Market Erases Trump Bloodbath But S&P 500 Hits Alarming Milestone
The US stock market has recovered all the ground it lost after Trump’s trade war threat on Monday, but the S&P 500 just hit an alarming milestone. | Source: Drew Angerer / Getty Images / AFP
President Trump triggered a 3% market selloff on Monday, after saying that he would effectively double down on the China trade war.
We are right where we want to be with China. Remember, they broke the deal with us & tried to renegotiate. We will be taking in Tens of Billions of Dollars in Tariffs from China. Buyers of product can make it themselves in the USA (ideal), or buy it from non-Tariffed countries…
— Donald J. Trump (@realDonaldTrump) May 12, 2019
American manufacturers oppose tariffs because they have drawn an equivalent Chinese response – hence the term “trade war” – reducing foreign demand for American-made products. They also lead to increased costs for US consumers.
Investors Wisen Up to Trump’s Jawboning
There are two reasons for this bounce-back.
First, the market is starting to realize that Donald Trump is playing the long game with China. Trump is no idiot. He’s a master strategist who understands the negative impact that a trade war creates on US manufacturers and consumers.