Ah, the financial markets. A bastion of logic, predictability, and sober analysis, right? Not when Donald J. Trump is in the news cycle. Today, July 23, 2025, the markets once again demonstrated their unique relationship with the former (and potentially future) President, swinging wildly between existential dread and euphoric rallies at the mere whisper of a tweet – or, more accurately, a Truth Social post.
The latest installment in this ongoing saga? A “massive” trade deal with Japan, announced with all the subtlety of a bull in a china shop – via his preferred social media platform, Truth Social. This announcement, coming hot on the heels of various tariff threats, sent global indices into a predictable tizzy, proving once again that when it comes to the Trump effect, the only constant is inconsistency, and the market, bless its heart, just can’t get enough of it.
The Art of the Deal, Redux: Japan Edition
For months, the specter of escalating tariffs loomed over trade relations with Japan. President Trump had previously threatened a hefty 25% tariff on Japanese imports, a move that surely kept many an executive at TM (Toyota Motor Corporation) and HMC (Honda Motor Co., Ltd.) up at night. But fear not, for the master negotiator has delivered! On Wednesday, July 23, 2025, Trump declared a “massive” trade agreement with Japan, which, in a stunning display of diplomatic dexterity, lowers the threatened tariff to a mere 15%. One might almost forget that the 25% threat was, in fact, his own creation. It’s a classic move: create a problem, then solve it with a flourish, and watch the applause roll in.
The markets, ever the optimists (or perhaps just easily swayed), ate it up. The DJIA (Dow Jones Industrial Average) surged, climbing over 250 points, or 0.6%, and nearing its all-time high. The SPX (S&P 500) also saw broad market gains, rising approximately 0.4% and continuing its upward trajectory, pushing it near record highs. Even the tech-heavy NDAQ (Nasdaq Composite) tacked on a modest 0.2%. Across the pond, the UKX (FTSE 100) closed at a record high for the third straight session, up 0.4% at 9,061.49 points, boosted by the US-Japan deal and positive corporate updates.
Japanese automakers, naturally, were among the biggest beneficiaries. Shares of TM (Toyota) jumped a remarkable 13-14%, while HMC (Honda) was up nearly 13% (+12.91% to be precise, reaching $34.34), marking its largest percentage increase since October 2008. Nissan also added 8%. This sudden burst of optimism, according to Morningstar analysts, takes the “bear-case scenario for average 32% tariffs off the table” for Japanese stocks. It’s almost as if creating uncertainty, then removing some of it, is a surefire way to generate positive market sentiment. Who knew?
Adding to the grand narrative, Trump declared that Japan would invest a staggering $550 billion into the U.S., which he grandly stated would yield “90% of the Profits” for the U.S. While the specifics of this profit-sharing arrangement remain, shall we say, unconventional, the sheer magnitude of the number was enough to send a ripple of excitement through the financial punditry. Japan’s Prime Minister Shigeru Ishiba, however, remained notably more circumspect, stating he needed to “carefully examine the details” before commenting. A wise man, that Ishiba.
The Tariff Tango: A Global Pas de Deux of Policy Flip-Flops
While the Japan deal provided a temporary balm, the broader landscape of Trump’s trade policy remains a chaotic symphony of threats and counter-threats. Just as markets celebrated the Japanese detente, reports surfaced that the European Union is busy preparing retaliatory tariffs of 20-30% on U.S. goods. This comes in response to Trump’s persistent threats of 30% tariffs on EU imports, signaling a readiness for a full-blown “trade war.” It seems the global economy is perpetually engaged in a high-stakes game of chicken, with tariff threats serving as the primary accelerant.
And it’s not just Europe. Trump has also announced a trade deal with the Philippines, complete with a 19% tariff, while simultaneously threatening to “significantly increase tariffs” on any country unwilling to “open their markets” to the U.S. We’ve seen hints of 10-15% tariffs on over 150 countries, a potential 35% on Canadian imports, and even a whopping 50% on Brazil. One can almost hear the collective sigh of relief from global trade officials when a “mere” 15% tariff is announced, rather than the more aggressive alternatives. It’s a low bar, but hey, it’s a bar.
The impact of this perpetual tariff tango is not merely theoretical. General Motors (GM), for example, recently reported a $1 billion hit from tariffs to its quarterly results, contributing to an 8.1% slump in its shares. This serves as a stark reminder that while the market might rally on a “deal,” the underlying costs of these trade skirmishes are very real and directly impact corporate profits and, by extension, investor portfolios. As one unnamed analyst so eloquently put it, some of Trump’s tariff pronouncements are just “meaningless show business.” Perhaps, but it’s a show that consistently moves markets.
Truth Social: The New Financial Wire
In a world where every word from a prominent figure can send ripples through the global economy, President Trump has found his preferred megaphone: Truth Social. It’s no longer just the traditional news wires or official press conferences that dictate market sentiment. Now, a late-night post on a social media platform can trigger multi-billion dollar swings. The Japan trade deal, the Philippines deal, and even his criticisms of Federal Reserve Chair Jerome Powell over interest rates were all disseminated via Truth Social.
This direct, unfiltered line to the market has become a defining characteristic of the “Trump effect.” Investors and algorithms alike are now constantly monitoring this digital pulpit, ready to react to the latest pronouncement, whether it’s a “massive” deal or a renewed threat of economic warfare. It’s a fascinating, if somewhat unnerving, evolution of financial news dissemination, where policy is announced not through formal channels, but through character-limited pronouncements that can be interpreted (or misinterpreted) in real-time by millions.
The Perpetual Pendulum: Volatility as a Feature, Not a Bug
The past few days, culminating in the Japan trade deal, perfectly encapsulate the “Trump market” phenomenon. Threats of tariffs create uncertainty, driving down certain sectors or indices. Then, a “deal” is announced, often reducing the very tariffs he initiated or threatened, and markets surge in relief. It’s a perpetual pendulum, swinging between anxiety and exuberance, with volatility seemingly a feature, not a bug, of this unique economic landscape.
The DJIA (+0.6%), SPX (+0.4%), and NDAQ (+0.2%) all closed higher on July 23, 2025, buoyed by the Japan deal. The UKX (FTSE 100) hit a new record high, up 0.4% at 9,061.49 points. And Japanese automakers like TM (+13-14%) and HMC (+12.91%) saw significant jumps. Yet, beneath the celebratory headlines, the lingering threat of new tariffs and trade disputes remains. The EU is still preparing its countermeasures, and other countries are undoubtedly holding their breath, wondering if they’ll be the next target of a “massive” deal or a “significantly increased” tariff.
Ultimately, navigating the Trump market requires a certain level of emotional detachment and a strong stomach for whiplash-inducing shifts. One day, it’s a trade war; the next, it’s the “largest deal ever made.” The only consistent advice seems to be: buckle up, stay tuned to Truth Social, and try not to get too attached to any single policy pronouncement. Because in this market, the only thing more predictable than a rally after a “deal” is the next unexpected threat that precedes it.
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.