Ah, the stock market. A bastion of rational thought, predictable trends, and calm, measured reactions. Unless, of course, Donald J. Trump is tweeting about trade. Then, it’s less a bastion and more a rollercoaster designed by a madman, complete with unexpected drops, sudden ascents, and the occasional, inexplicable loop-de-loop. The past week, ending July 25, 2025, has been a masterclass in this peculiar phenomenon, as markets attempted to decipher the latest pronouncements from the former (and potentially future) President, often with results that would make even the most seasoned analyst scratch their head.
Tariff Tango: Two Steps Forward, One Step Back (or Sideways)
The recurring theme, naturally, is tariffs. President Trump, a connoisseur of the “reciprocal tariff” and a man who famously declared “Tariff is the most beautiful word in the dictionary,” has been busy. Very busy. He’s been announcing trade deals, threatening new tariffs, pausing old tariffs, and generally keeping the global economy on its toes. On July 25, 2025, the Dow Jones Industrial Average fell 0.7% (316.38 points) to close at 44,693.91, while the S&P 500 managed a modest gain of 0.1% to 6,363.35, and the Nasdaq Composite rose 0.2% to 21,057.96, hitting a new closing high. This mixed bag of results came as “market participants were busy weighing developments on trade policies.”
Consider the recent “massive” trade deal with Japan, announced earlier in the week, which capped tariffs at a mere 15%. Markets, ever the optimists, cheered this, sending the S&P 500 to a record high of 6,388 points and the Nasdaq to 21,108.32. One might think a 15% tariff would still be cause for concern, but as Brian Jacobsen, chief economist at Annex Wealth Management, sagely noted, “It’s a sign of the times that markets would cheer 15% tariffs. A year ago, that level of tariffs would be shocking. Today, we breathe a sigh of relief.” Such is the new normal. The Dow Jones Industrial Average also saw a gain of 0.5% on Friday, rising 208.01 points to 44,901.92, completing a week where it was up 1.3%.
Yet, even as Japan celebrates its “massive” deal, other nations are bracing for impact. The August 1 deadline for new “reciprocal” tariffs looms large, threatening rates as high as 30% for the European Union and 35% for Canadian imports. Volkswagen, for instance, has already reported a staggering $1.5 billion hit in the first half of 2025 due to these tariffs, prompting the German automaker to cut its full-year sales and profit margin forecasts. CEO Oliver Blume is now “hoping for a well-balanced deal” with the U.S., leveraging Volkswagen’s “attractive” investments in the U.S. as a bargaining chip. One can almost hear the faint strains of a violin playing “The Price is Right” theme song in the background.
Meanwhile, the U.S. steel industry is experiencing its own unique brand of market volatility. While the Section 232 tariffs on steel doubled to 50% on June 3, cold-rolled coil prices in the U.S. have continued to decline, widening the gap with imports. It seems even a 50% tariff isn’t enough to completely defy the laws of supply and demand, much to the chagrin of those who believe in simple, declarative policy statements.
Truth Social & Tesla: A Tale of Two Tweets (and a Tumbling Stock)
Beyond the realm of traditional trade policy, President Trump’s influence extends to the digital sphere, particularly through his platform, Truth Social. This week saw a peculiar exchange involving Elon Musk and his company, Tesla. After a dismal second-quarter earnings report, which saw Tesla‘s revenue drop 12% year-over-year and net income fall 16%, Elon Musk acknowledged “a few rough quarters” ahead. Tesla stock tumbled 8.2% on Thursday, July 24, 2025, pulling the Dow Jones Industrial Average down with it.
In a surprising turn, President Trump, via Truth Social, declared his desire for Elon Musk’s companies to “THRIVE,” seemingly extending an olive branch despite their past public spats. This presidential blessing, however, did little to stem the tide for Tesla, which continued its slide. It appears that even a presidential endorsement on social media isn’t a substitute for strong earnings and a clear path forward in a highly competitive EV market, especially with the looming expiration of federal EV tax credits at the end of September. The stock did rebound slightly on Friday, gaining nearly 3.6% on renewed optimism about its robotaxi business, but the week still saw significant volatility for the EV giant.
Analyst Angst and the August 1st Deadline
Analysts, bless their hearts, are trying to make sense of it all. Many acknowledge that the full impact of Trump’s tariffs hasn’t been felt yet, with some businesses building up inventory to mitigate rising costs. The Yale Budget Lab predicts that price increases due to tariffs could cost U.S. households an average of an extra $2,700 in 2025, with back-to-school shopping being “particularly exposed”. This, they note, makes tariffs a “regressive tax” that disproportionately affects lower-income families.
Despite these warnings, the broader market has shown a surprising resilience. The S&P 500 and Nasdaq Composite both closed at record highs on July 25, 2025, driven by strong corporate earnings, particularly from AI-related stocks, and optimism about potential trade agreements. The Dow Jones Industrial Average also posted moderate gains for the week, up 1.3%. This “divergence between media skepticism and investor outlook” is a testament to the market’s ability to find silver linings, even amidst a storm of policy uncertainty. As one analyst put it, “As long as trade policy and tariff headwinds are minor, the market can keep moving higher and we are now optimistic for the second half of this year.”
However, the August 1 deadline remains a critical point. While some trade deals have been announced, many countries still face the prospect of steep tariffs. The European Union, for example, is reportedly preparing countermeasures if a deal isn’t reached. The Federal Reserve is in “wait and learn” mode regarding the impact of tariffs on inflation, but still expects to cut interest rates this year. The long-term economic effects of these tariffs, including a projected 0.8% reduction in GDP and a loss of 788,000 full-time equivalent jobs, paint a less rosy picture.
The Boeing Bounce (and the Intel Implosion)
Amidst the trade theatrics, individual companies have had their own dramas. Boeing (BA), often a bellwether for global trade, has seen its shares gain a “notable percentage” over the past three months, up 29.6%. This comes despite a reported decline in aircraft purchases that impacted durable goods orders in June. The company is set to announce earnings on July 29, 2025, and historically, its stock has shown a tendency for negative one-day returns post-earnings. However, analysts are projecting an improvement in financial performance for the upcoming quarter.
On the flip side, Intel (INTC) stock tumbled 8.5% on Friday after the semiconductor giant posted an unexpected quarterly loss and announced it would cut thousands of jobs. This sharp drop for Intel weighed on the Dow, despite broader market strength. It seems even in a market seemingly fueled by AI optimism, old-fashioned earnings still matter.
Conclusion: A Market of Contradictions
In essence, the market’s reaction to Trump’s policies is a study in contradictions. On one hand, there’s a palpable relief when tariffs are “only” 15% instead of 25% or 30%. On the other, major indices are hitting record highs, seemingly shrugging off the very policies that are causing multi-billion dollar hits to global corporations. Investors are simultaneously optimistic about trade deals and wary of the “uncertainty” that trade policy creates. It’s a market that thrives on earnings and AI hype, yet can be swayed by a single Truth Social post (even if the impact is fleeting). As the August 1st deadline approaches, one can only wonder what fresh absurdities the market will be forced to digest. Perhaps a new “most beautiful word” will emerge from the lexicon of trade, or perhaps we’ll all just get used to the dizzying dance.
DISCLAIMER: We read Trump’s posts so you don’t have to. This is comedy meets market data, not financial advice. Not political advice either – we just like charts and chaos.
Elana Harper is a seasoned financial editor and market analyst with over a decade of experience covering global equities, economic trends, and corporate earnings. Known for her sharp insights, Elana specializes in making complex financial topics accessible to a broad audience. She now serves as the Senior Financial Editor at Stock Market Watch, where she oversees daily market coverage and political commentary.