Ah, the stock market. A bastion of rational thought, predictable trends, and calm, measured reactions. Or, if you’ve been paying any attention to the last few years, a wild, unpredictable beast dancing to the erratic beat of a single, very loud drum. And on this fine Thursday, August 7, 2025, the maestro of market mayhem, President Donald Trump, once again conducted a symphony of policy pronouncements that left investors simultaneously scratching their heads and frantically hitting “buy” or “sell” depending on which exemption applied to them. It’s less economics, more a high-stakes game of “Simon Says,” where Simon occasionally changes his mind mid-sentence.
The latest installment of the Trumpian trade saga saw the imposition of sweeping new tariffs, ostensibly to bring manufacturing jobs back home. The average effective U.S. tariff rate, according to the Yale Budget Lab, has now soared to an eye-watering 18.6%, the highest since 1933. Bloomberg Economics, ever the contrarian, pegs it slightly lower at a mere 15.2%. Either way, it’s a significant hike from the roughly 2% when the President first took office, proving that when it comes to import taxes, he’s a man of his word – eventually.
The Tariff Tango: India Takes a Hit, Switzerland Sweats
Leading the charge in this new tariff offensive was India, which found itself on the receiving end of an additional 25% tariff, bringing its total levy to a staggering 50% on certain goods. The stated reason? India’s continued purchases of Russian oil. Because, clearly, nothing says “America First” like penalizing a geopolitical ally for its energy security needs, especially when it might, just might, pressure Moscow. It’s a foreign policy masterclass, if your goal is to confuse everyone. Meanwhile, Switzerland, a nation renowned for its neutrality and chocolate, was reportedly in emergency talks in Washington to head off a 39% levy. One can only imagine the diplomatic chocolate-for-tariffs negotiations.
Economists, bless their rational hearts, continue to warn that these tariffs are “fine sand in the gears” of the economy, steadily eroding growth rather than causing an immediate collapse. The U.S. economy is already showing signs of “economic pain,” with job creation appearing to near “stall speed.” But fear not, for the White House remains confident that an economic boom is just around the corner, leaving “the rest of Americans” to pay the price for the uncertainty. It’s a bold strategy, Cotton, let’s see if it pays off for them.
The Chip Charade: Apple’s Artful Dodge and Intel’s Implosion
The true spectacle of the day, however, unfolded in the semiconductor sector. President Trump announced a whopping 100% tariff on imported computer chips and semiconductors. The catch? A rather significant exemption for companies that commit to, or are already, manufacturing in the United States. This “pay-to-play” model, as some analysts have dubbed it, immediately sparked a bifurcated market reaction. It’s almost as if the President enjoys making companies sweat before offering them a golden ticket, provided they build a factory in Ohio.
And who, pray tell, was standing right there in the Oval Office with the President as this monumental policy was unveiled? None other than Apple CEO Tim Cook. Fresh off a previous $500 billion commitment, Apple announced an additional $100 billion investment in U.S. manufacturing, bringing their total pledge to a cool $600 billion over four years. This strategic move, hailed by JPMorgan analysts as a “masterclass in managing geo-political uncertainty,” sent AAPL shares soaring. After gaining 5.1% in Wednesday’s session, the iPhone maker’s stock climbed another 3% in recent trading on Thursday, reaching approximately $189. Wall Street analysts, ever the optimists when a tech giant plays ball, promptly raised their price targets, with Bank of America eyeing $250 and Wedbush setting a lofty $270. One analyst, however, still dismissively called the idea of iPhones being entirely made in the U.S. a “fairy tale concept.” Details, details.
The semiconductor industry, generally, breathed a sigh of relief, or at least a less-stressed sigh. Major chipmakers like NVDA and AMD saw gains. NVDA shares rose in the range of 1.2% to 2.5%, with some reports showing a 0.5% gain in recent trading. AMD climbed an impressive 5%. Even TSMC, the world’s largest contract chipmaker, surged 4.9% in Taiwan after ramping up its U.S. investments. The VanEck Semiconductor ETF SMH also saw a respectable 1.2% rise.
But not all chip news was good news, especially for one particular company. In a classic Truth Social broadside, President Trump demanded the immediate resignation of INTC CEO Lip-Bu Tan, declaring him “highly CONFLICTED.” This public denunciation, reportedly fueled by concerns over Tan’s ties to Chinese companies and even the Chinese People’s Liberation Army, sent INTC shares tumbling. The stock fell nearly 4% in recent trading on Thursday, after an initial 5% drop in premarket. It seems that while some companies get a tariff exemption for investing in the U.S., others get a very public job termination notice via social media.
The Truth Social Echo Chamber: Where Policy Meets Post
Speaking of social media, President Trump’s preferred platform, Truth Social, continues to be a primary conduit for his policy pronouncements and market commentary. From cheering on the “billions of dollars” flowing into the U.S. thanks to his tariffs to demanding executive resignations, the platform offers a unique, unfiltered glimpse into the mind of the market mover. It’s a place where economic policy is less about carefully crafted legislation and more about capital letters and exclamation points. One can only imagine the algorithms trying to keep up with the real-time shifts in global trade policy based on a single post.
The Broader Market Beat: A Study in Contradictions
Despite the flurry of tariff announcements and the inherent confusion, the broader U.S. stock market displayed a peculiar resilience, or perhaps, a deep-seated exhaustion. The S&P 500, after an early rise of 0.5%, edged down 0.1% by late morning, eventually closing down 0.10% for the day. The Dow Jones Industrial Average, initially up 226 points, reversed course to be down 330 points, or 0.7%, by 11:45 a.m. ET, ending the day down 0.71%. Meanwhile, the tech-heavy Nasdaq Composite, buoyed by the semiconductor rally, managed to stay in the green, up 0.4% by late morning and closing up 0.43%. It seems the market, like a seasoned parent, has learned to mostly ignore the tantrums and focus on the underlying fundamentals – or, more accurately, the hope of future Fed interest rate cuts and stronger-than-expected corporate earnings.
Indeed, analysts frequently invoke the “TACO” trade, an acronym for “Trump Always Chickens Out,” suggesting that his most draconian threats often soften or come with significant loopholes. This sentiment, combined with robust earnings reports from companies like DoorDash (DASH +9%) and Duolingo (DUOL +30%), appears to be providing a counter-narrative to the tariff-induced anxieties. However, not all companies were so fortunate; footwear company Crocs (CROX) tumbled a staggering 25.2% due to cautious guidance and the drag of tariffs on profitability. Toyota also saw its stock fall after cutting profit forecasts due to the tariffs.
In conclusion, the Trump effect on stock markets remains a fascinating, if not entirely logical, phenomenon. It’s a blend of headline-grabbing threats, last-minute exemptions, and a market that, while occasionally spooked, seems to find its footing through a combination of corporate maneuvering and a healthy dose of “wait and see.” The chaos, it appears, is simply part of the new normal, a theatrical performance where the audience (investors) has learned to decipher the script, even when it’s being rewritten live on Truth Social. As long as there are loopholes and the promise of a “deal,” the show, and the market, will go on.
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.