Ah, the financial markets. A bastion of logic, predictability, and sober analysis, right? Not when Donald J. Trump is in the vicinity. The past week, much like the broader landscape of his influence, has been a masterclass in economic whiplash, where pronouncements from Truth Social dictate fortunes faster than a Fed meeting. Investors, it seems, are perpetually on standby, ready to pivot their portfolios based on the latest presidential musing, often delivered with the subtlety of a bull in a china shop – a china shop, ironically, often subject to new tariffs. It’s less about fundamentals and more about following the leader, wherever he may tweet. And this week, the tweets have been particularly potent, sending ripples, if not tidal waves, across global exchanges.
Tariff Tango: India, Gold, and the Art of the Economic Surprise
Let’s start with the tariffs, a perennial favorite in the Trump playbook. Just last week, the U.S. President decided India needed a little nudge, announcing a 25% tariff on Indian imports, swiftly followed by an additional 25% “penalty” for India’s continued trade with Russia, bringing the grand total to a staggering 50% on certain goods. This move, which effectively puts $87 billion worth of Indian exports to the U.S. at risk, was met with a rather curious reaction from the Indian stock market. While the Gift Nifty initially dipped by nearly 200 points and the rupee tumbled to a five-month low, the broader Indian markets, like the Sensex and Nifty, showed a surprising resilience, gaining on August 7, the day the initial 25% tariff took effect. Apparently, some investors are now so accustomed to the tariff theatrics that they’re either immune or just waiting for the inevitable reversal. As one analyst quipped, the oil market’s “subdued response” to U.S. warnings about India’s Russian oil purchases suggests a “widespread belief that substantial actions are unlikely to materialise.”
Then there’s the universal 10% tariff on all imports, a policy that sent global markets plummeting when it first took effect in April 2025. The S&P 500 fell 6%, the Dow Jones Industrial Average plunged 5.5%, and the Nasdaq Composite dropped 5.8%, marking the worst week for financial markets since the COVID-19 pandemic’s onset. Yet, in typical fashion, a 90-day pause was announced shortly after, with the exception of tariffs on China, causing the U.S. stock market to surge immediately. It seems the market’s memory is as short as a news cycle, quickly forgetting the plunge in favor of the rebound. The current average applied U.S. tariff rate, which peaked at an estimated 27% from January to April 2025, now stands at an estimated 18.6% as of August 2025, after various adjustments and negotiations.
And let’s not forget the curious case of gold. After a U.S. Customs and Border Protection (CBP) letter on July 31 suggested certain gold bars could face import tariffs, sending gold futures soaring to record highs, President Trump took to Truth Social on Monday to declare, with characteristic finality, that “Gold will not be Tariffed!”. This executive order, expected to calm the market chaos, effectively removed a “potential source of price uncertainty” that had been weighing on gold markets. Gold futures for December delivery, which hit a record high on Friday, August 8, on the Comex, subsequently dropped 2.4% on Monday following Trump’s clarification. It’s a testament to the power of a single social media post to both ignite and extinguish market anxieties, often within days.
The Fed Fiasco: Powell Under Fire (Again)
Beyond trade, the Federal Reserve and its chairman, Jerome Powell, remain a constant target. In a series of irate posts on Truth Social, Trump renewed his attacks, labeling Powell “Jerome ‘Too Late’ Powell” and demanding an immediate interest rate cut. The audacity of threatening a “major lawsuit” against Powell, ostensibly over the “horrible, and grossly incompetent” management of a $3 billion Fed building renovation project that “should have been a $50 Million Dollar fix up,” is truly a sight to behold. Legal experts, naturally, have pointed out the unprecedented nature and constitutional hurdles of suing a Fed chair over policy decisions.
However, the market, ever the pragmatist, seems to be taking cues from the underlying economic data rather than the presidential rhetoric. Despite Trump’s claims that the economy is “sooo good that we’ve blown through Powell and the complacent Board,” recent inflation reports have provided a more tangible impetus for market optimism. The Consumer Price Index (CPI) report released on August 12 showed annual inflation holding steady at 2.7% in July, slightly better than economists had expected. This benign inflation report has significantly boosted expectations for Federal Reserve rate cuts, with investors widely anticipating a 50-basis-point reduction across the next two meetings in September and October. The U.S. Dollar Index (DXY) even dipped from around 98.60 to a daily low of 98.13 on Trump’s remarks, as traders “discount threats on the independence of the Federal Reserve”. It appears that while the insults fly, the market keeps its eye on the actual numbers.
Corporate Casualties and Cannabis Comebacks
Individual companies have also found themselves caught in the crosshairs of the Trumpian economic whirlwind. Take Intel (INTC), for instance. Just days after President Trump publicly called for CEO Lip-Bu Tan’s resignation over alleged ties to the Chinese Communist Party, sending Intel shares down by over 3%, a White House meeting miraculously reversed the narrative. Following the “candid and constructive discussion,” Trump praised Tan’s “success and rise” as “an amazing story,” leading to a remarkable turnaround for the chipmaker’s stock. On Tuesday, August 12, Intel shares climbed 5.5% to close at $21.81, fueled by this newfound political momentum, with trading volume surging over 55% above its three-month average. It’s a stark reminder that in this market, a presidential endorsement can be worth more than a dozen positive analyst reports.
Meanwhile, the cannabis sector enjoyed a truly euphoric week. Shares of pot companies, including Tilray Brands (TLRY), Canopy Growth (CGC), and Cronos Group (CRON), surged by double digits – Tilray popped nearly 18-24%, Canopy Growth rallied by more than 18-30%, and the ETF MSOS was up 7% in premarket trading and 18.5% on Monday. The catalyst? Reports that President Trump is “considering” reclassifying marijuana from Schedule I (alongside heroin) to Schedule III, a move that could significantly ease federal restrictions and unlock major tax relief for the industry. The prospect of simply being considered “less dangerous” by federal law was enough to send these stocks soaring, proving that sometimes, all it takes is a hint of policy change to light up a sector.
Not all news was met with unbridled enthusiasm, however. Nvidia (NVDA) and AMD (AMD), two titans of the AI chip market, struck a deal with the Trump administration to resume selling advanced AI chips to China. The catch? They agreed to give the U.S. government a 15% cut of their China AI chip sales revenue in exchange for export licenses. This “highly unusual arrangement” was met with a mixed market reaction, with Nvidia shares dipping between 1% and 1.8% and AMD falling about 2%–3% in early trading after the announcement. While some analysts predict a surge for Nvidia, others warn the revenue hit could weigh on profits. It seems even a lucrative deal can be viewed with skepticism when it involves a mandatory government cut. One might call it a “political tariff” in itself.
Goldman Sachs and the “Bad Prediction”
No discussion of Trump’s market impact would be complete without a nod to his ongoing feud with Wall Street, particularly Goldman Sachs (GS) CEO David Solomon. Trump, taking to Truth Social, assailed Solomon, claiming the bank made a “bad prediction” about the impact of his “sweeping tariff agenda on markets and consumer costs”. He even suggested Solomon “ought to just focus on being a DJ, and not bother running a major Financial Institution,” a rather pointed jab at Solomon’s well-known hobby.
This public rebuke came just hours after Goldman Sachs economists, led by chief economist Jan Hatzius, issued a note stating that U.S. consumers had absorbed 22% of tariff costs through June, a figure they predicted could rise to 67% if recent tariffs continued on the same trajectory. Goldman had also warned in April that sweeping U.S. tariffs would weigh on global growth and prompt the Federal Reserve to cut interest rates more aggressively. Trump, however, remains steadfast in his belief that tariffs have “strengthened the stock market, increased national wealth, and boosted Treasury revenues without triggering inflation,” arguing that the burden falls on foreign governments and companies, not American consumers. The market, meanwhile, continues to navigate this fascinating divergence between presidential proclamations and economic analyses, often with a shrug and a surge.
The Indices: A Week of Records and Relief
Despite the constant policy pronouncements and the occasional corporate skirmish, the major U.S. indices largely ended the week on a high note. On Tuesday, August 12, 2025, the Dow Jones Industrial Average (DJI) surged by 1.02% to close at 44,424.94, or added 1.1%. The S&P 500 (SPX) rose 0.59% to 6,410.94, or 1.1% to close at a new record high. The tech-heavy Nasdaq Composite (IXIC) climbed 0.53% to 21,499.17, or 1.4%, also hitting its third record close in four days. These gains were largely attributed to the aforementioned benign CPI report, which fueled hopes for Federal Reserve rate cuts, easing investor concerns about inflation and the economic outlook. It appears that even in the midst of a perpetual policy soap opera, a little bit of good economic data can still cut through the noise, at least for a day. The market, it seems, is always ready for its next act, even if the script keeps changing.
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.