US stocks rise as Trump signals tariff negotiations
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(NEW YORK) — U.S. stocks rose on Tuesday in a burst of investor optimism as the Trump administration signaled plans to negotiate with some countries targeted by sweeping new tariffs.
The Dow Jones Industrial Average jumped 1,385 points, or 3.6%, while the tech-heavy Nasdaq increased 3.7%. The S&P 500 was up 3.3%.
The move followed an upswing in markets worldwide.
Asian markets opened in positive territory after posting significant losses on Monday driven by President Donald Trump’s global tariffs campaign,
Japan’s Nikkei index closed just over 6% up on Tuesday, recovering some of almost 8% of losses posted on Monday.
South Korea’s KOSPI index rose by 0.3%, Australia’s S&P/ASX 200 grew by 2.2% and India’s NIFTY 50 index climbed almost 2%.
Hong Kong’s Hang Seng index — which on Monday posted its worst day since 1997 losing 13% — rebounded with a 1% rise on Tuesday. Shanghai’s Composite Index grew 1.4%.
European markets also edged into the green after a tumultuous start to the week. The British FTSE 100 picked up 1.3% shortly after opening, Germany’s DAX gained 0.9% and France’s CAC 40 rose 1.3%.
Monday’s rollercoaster trading saw the Dow post its largest intraday point swing ever — falling more than 1,700 points during its Monday session low, then swinging up 2,595 points from the low.
The Dow dropped 349 points, or 0.91%, while the tech-heavy Nasdaq ticked up 0.1%. The S&P 500 closed down 0.23%. Its 8.5% high/low spread has only happened 20 other times since 1962, according to S&P Global.
The S&P 500 briefly entered bear market territory during the session but was last off nearly 18% from its recent high.
ABC News’ Max Zahn and Joe Simonetti contributed to this report.
(WASHINGTON) — Few of President Donald Trump’s first 100 days in his second term carried more fanfare than April 2, which Trump previewed for weeks under the moniker of “Liberation Day.”
At a Rose Garden ceremony replete with a live band and floor-to-ceiling American flags, Trump announced the nation’s largest set of tariffs in nearly a century.
For decades, Trump claimed, other nations had erected trade barriers to shut U.S. companies out of their markets, all the while enriching themselves through access to American shoppers. As a result, factories had shuttered and workers had suffered, Trump added.
“In the face of unrelenting economic warfare, the United States can no longer continue with a policy of unilateral economic surrender,” Trump said.
The tariff announcement, he added, would forever be remembered as “the day that we began to make America wealthy again.”
Instead, the major stock indexes lost about $3.1 trillion in value the next day, suffering their biggest one-day decline since the onset of the COVID-19 pandemic. Days later, Trump suspended a major swathe of the tariffs, sending the market to one of its largest ever single-day increases.
The policy exemplified Trump’s handling of the economy so far in his second term, some experts said. A norm-breaking decision adjusted soon afterward, leaving behind a cloud of uncertainty for consumers and business alike, while risking an economic slowdown.
It remains to be seen whether the potential pain will be outweighed by future gain, experts said, but the policy swerves may undermine those benefits as firms lack the assurance necessary to make long-term investment and hiring decisions.
“This isn’t how we normally do business. We normally like stability and predictability,” Nancy Qian, a professor of economics at Northwestern University, told ABC News. “The cycle of uncertainty is freaking people out.”
‘Challenged the rules of the global trading system’
Trump’s tariff rollout took Wall Street by surprise, but the president had repeatedly promised to make use of the policy tool during his presidential campaign.
“To me, the most beautiful word in the dictionary is ‘tariff,'” Trump said weeks before the election during an appearance at the Economic Club of Chicago.
As a candidate, Trump proposed tariffs of between 60% and 100% on Chinese goods, as well as across-the-board tariffs of between 10% and 20% on all imported goods.
Tariffs would hinder foreign producers and boost domestic manufacturers, reinvigorating regions left behind as the sector’s jobs moved overseas, Trump said.
In the first 100 days, Trump has taken the policy even further than he pledged, experts said.
Trump slapped 145% tariffs on Chinese goods, as well as a universal tariff of 10% on nearly all imports.
Trump also imposed 25% tariffs on Mexico and Canada, the nation’s neighbors, thought to be among its closest allies. Additional tariffs have hit autos, steel and aluminum. For now, Trump has paused a far-reaching set of so-called “reciprocal tariffs” targeting about 75 countries.
“We face the stark reality of large and persistent U.S. deficits as a result of an unfair trading system,” Treasury Secretary Scott Bessent told an audience at the Institute of International Finance in Washington, D.C. last week. “Intentional policy choices by other countries have hollowed out America’s manufacturing sector and undermined our critical supply chains, putting our national and economic security at risk.”
“President Trump has taken strong action to address these imbalances and the negative impacts they have on Americans,” Bessent added.
Qian, of Northwestern University, said Trump’s policy accurately identifies a challenge facing the U.S. economy, as trade partners erect barriers that make it more difficult for some American companies to sell abroad than it is for their foreign competitors to sell in the U.S.
The on-again, off-again approach to tariffs undermines the policy objective, however, since businesses and investors lack the confidence necessary to build up domestic manufacturing or adjust strategy abroad.
“What manufacturers need is what markets need: stability,” Qian said.
Trump’s tariffs elicited retaliatory measures from some countries, including China. The world’s second-largest economy slapped 125% tariffs on U.S. goods and placed export restrictions on some minerals crucial to domestic electronics and weapons industries.
“Trump’s tariffs challenged the very premise of the rules of the world trading system,” Robert Lawrence, a professor of trade and investment at Harvard University’s Kennedy School of Government, told ABC News. “He has done a lot more than he said he would do.”
Consumer sentiment this month dropped to a level lower than any point during the Great Recession. A slew of Wall Street firms, meanwhile, have raised their odds of a U.S. recession within the next year, forecasting a potential drop-off of consumer spending and business investment.
For its part, the Trump administration has largely refused to rule out the possibility of a recession. Trump has vowed to strike new agreements with many U.S. trade partners, predicting the U.S economy may suffer short-term pain but will ultimately flourish under a more favorable set of international rules.
“We have been ripped off by every country in the world practically. And friend and foe,” Trump told reporters in the Oval Office on April 23. “We’re not doing that anymore.”
The fight against inflation
During the campaign, inflation consistently ranked as a top issue of concern to voters – and a majority of them favored Trump to best handle the problem, surveys showed.
Trump vowed to address the issue, saying he would lower prices on “day one.”
Prices would come down as a result of increased energy output, which would reduce costs for the production and transport of goods and in turn lower prices, Trump said.
Inflation has eased since Trump took office, meaning prices have risen at a slower pace than they had been at the end of the Biden administration. Consumer prices increased 2.4% in March compared to a year earlier, registering a pace slightly higher than the Fed’s target of 2%.
Overall prices have not fallen, however, experts told ABC News. In fact, some prices have climbed significantly. Egg prices are 60% higher than where they stood a year ago. Bird flu has continued to decimate the egg supply, lifting prices.
To be sure, the price of oil has dropped nearly 20% since Trump took office. However, experts attributed the trend to an anticipated drop in demand as investors worry about a global recession, instead of the spike in output promised by Trump.
The current level of inflation may offer false reassurance, experts added, since tariffs are widely expected to raise prices over the coming months.
“We are not yet applying the tariffs to the maximum degree and that of course reduces the impact seen in the data so far,” Felix Tintelnot, a professor of economics at Duke University, told ABC News.
Earlier this month, Federal Reserve Chair Jerome Powell raised the possibility that Trump’s tariffs may cause what economists call “stagflation,” which is when inflation rises and the economy slows.
If the Fed raises interest rates as a means of protecting against tariff-induced inflation under such a scenario, it risks stifling borrowing and slowing the economy further. On the other hand, if the Fed lowers rates to stimulate the economy in the face of a potential slowdown, it threatens to boost spending and worsen inflation.
A day later, Trump sharply criticized Powell, urging the central bank to lower interest rates and saying Powell’s “termination cannot come soon enough.”
Since Trump took office, he has criticized Powell on multiple occasions, despite a longstanding norm of political independence at the central bank. The Fed is an independent government agency established by Congress.
“It’s a fundamental feature of our economic system that we have an independent Fed,” Lawrence said. “Trump’s threats are deeply concerning.”
In theory, the removal of Powell could undermine the Fed’s capacity to fight inflation, since it may make the central bank more likely to follow Trump’s preference for lower rates, Lawrence said.
Trump appeared to soften previous attacks on the Federal Reserve last week, saying he has “no intention” of firing Powell.
After making those remarks, Trump continued to pressure Powell.
“I would like to see him be a little more active in terms of his idea to lower interest rates,” Trump said. “This is a perfect time to lower interest rates.”
(NEW YORK) — The U.S. trade deficit narrowed significantly in April as President Donald Trump sharply escalated tariffs before pausing a large swath of the levies, U.S. Commerce Department data on Thursday showed.
Trump touted the tariffs as an effort to slash the nation’s trade deficit, which the president has said he considers a threat to the nation’s economic prosperity. Many economists disagree, however, saying the trade deficit reflects the consumer-driven engine of the U.S. economy.
The trade gap fell by more than half in April as imports plunged, the data showed. The U.S. registered a trade deficit of about $61 billion in April, marking a sharp decline from a $140 billion trade gap a month earlier.
Imports dropped by 16% in April as some trade barriers took effect, the data showed. Imports had ticked upward a month earlier as some firms rushed to stockpile supply before the levies saddled them with additional costs.
The nation’s trade gap stands well below the $131 billion deficit recorded in January, the month Trump took office.
The outlook is murky for the Trump’s tariff policy and the wider economy.
Trump’s on-again, off-again approach to tariffs leaves in doubt their ultimate level. A pair of court rulings last week thrust Trump’s steepest tariffs into limbo, adding another layer of uncertainty as federal appeals court judges determine whether a significant number of the policies pass legal muster.
The uncertain policy environment facing businesses has coincided with an anxious moment for consumers. Consumer attitudes have soured for four consecutive months as tariffs have taken hold, according to a survey conducted by the University of Michigan.
Consumer spending, which accounts for about two-thirds of U.S. economic activity, could weaken if shopper appetites diminish and import prices rise.
So far, key measures of the economy have largely defied fears of a downturn. The unemployment rate stands at a historically low level and job growth remains robust, though it has slowed from previous highs. In recent months, inflation has cooled, reaching its lowest level since 2021.
The Organization for Economic Co-operation and Development, or OECD, forecast on Tuesday continued growth for the U.S. economy in 2025 and 2026, albeit at a slower pace than last year. Additionally, recession forecasts on Wall Street faded in recent weeks after Trump rolled back some tariffs.
(WASHINGTON) — The race to win tickets to an exclusive crypto dinner gala with President Donald Trump at his private golf club in Virginia on May 22 ended with top 220 holders of the Trump meme coin winning invitations to the black tie gala, the coin’s official X account announced Monday.
A “leaderboard” of the top 220 holders appearing on the website did not display the identities of the winners, but it listed numerous wallets that some crypto experts have linked to possible foreign individuals and entities, heightening concerns about potential conflicts of interest arising from the Trump family’s businesses and foreign interests.
According to the meme coin’s website, the top 25 “VIP holders” were also invited to what it described as an “Exclusive Reception before Dinner” and a “Special VIP Tour.”
As the Trump family stands to potentially take in tens of millions of dollars from the coin’s transactions and possibly even more from its ownership of the coin, the price of Trump’s meme coin has been in constant fluctuation over the past three weeks, with numerous supporters and crypto enthusiasts flocking to purchase the coin to secure a seat at the gala while numerous others sell the coin to profit off the hype.
The coin’s price dropped rapidly on Monday as the competition ended, and was priced at $12.59 as of 4 p.m. ET. When the gala competition was first announced last year, the coin’s price jumped by more than 55% and later reached a high of nearly $16.42, according to Coinbase.com.
While fluctuations in the Trump coin’s price have resulted in massive profits for a fortunate few, hundreds of thousands of investors have reportedly lost money on the coin. According to CNBC’s reporting of blockchain analytics firm Chainalysis’ data, roughly 764,000 crypto wallets have lost money on Trump meme coin investments, while 58 wallets have made millions from their Trump coin investments.
A White House spokesperson did not immediately respond to a request for comment from ABC News.
Although the coin’s website had earlier advertised a “Special VIP White House tour” for the top 25 coin holders, as of Monday afternoon it simply said “Special VIP tour,” without mentioning the White House. Additionally, the website included a disclaimer saying the tour is being arranged by the Fight Fight Fight LLC, and that the president himself is appearing as a “guest.”
In its social media announcement about the conclusion of the contest, the post also announced a “rewards points program” and the awarding of “exclusive NFTs” for the winners.
According to crypto experts, the wallet of the top coin holder — nicknamed “Sun” and currently holding roughly $16.6 million worth of the Trump meme coin — is owned by a foreign crypto exchange advised by Chinese billionaire Justin Sun, who recently moderated a panel discussion between Eric Trump and Zack Witkoff at a crypto conference in Dubai, where Witkoff announced the other Trump family crypto venture, World Liberty Financial, had partnered in a $2 billion business deal with an Abu Dahbi state-backed investment firm. Justin Sun did not immediately respond to a request for comment from ABC News.
Sun is also one of World Liberty Financials’ biggest investors, purchasing $75 million worth of its coin the day before Trump’s inauguration earlier this year. A month after that investment, SEC lawyers under the Trump administration moved to halt an alleged fraud case against Sun, who along with his companies has denied wrongdoing.
The second top holder, a Singaporean entity identified by crypto experts as likely being MemeCore, and nicknamed “MeCo,” has been more vocal about their race to secure a VIP ticket — publicly soliciting followers to send Trump coin to their wallet so they can achieve “#1 on the $TRUMP leaderboard” and “conquer the entire meme space,” with the promise of returning the tokens after the event.
In all, the top 220 folders hold a total of 13.7 million Trump coins, valued at nearly $14 million as of 4 p.m. ET Monday, according to Coinbase.com.
Notably, 17 out of the top 220 coin holders on the leaderboard, including one in the top 25, appeared to hold zero Trump coin as of Monday afternoon — possibly meaning that they sold their holdings before the contest ended.
Experts say this is possible because the top 220 holders were chosen based on “time weighted holdings,” which were calculated based on “both the amount and duration” of one’s holdings from April 23 through May 12. “The longer you hold, the higher your weighted score becomes,” the website says.
It’s not clear if the zero Trump coin holders will get invited to the event.
