The stock market, that ever-fickle beast, has recently found itself performing a rather spirited, if somewhat bewildered, dance to the tune of President Donald Trump’s latest policy pronouncements. In a week that saw everything from “pretty much” finalized TikTok deals to tariffs threatening to reach a staggering 70%, investors have been left to decipher a policy playbook that appears to be written in disappearing ink. The overarching theme? Volatility, punctuated by moments of inexplicable exuberance, as the market attempts to price in the latest iteration of “America First” trade strategy.
The Art of the Deal, Redux: Vietnam and the Shifting Sands of Tariffs
Just when you thought you had a handle on the global trade landscape, President Trump delivered a fresh twist. On July 2nd, the White House proudly announced a “trade deal” with Vietnam. This, according to various reports, involved “setting the tariff rate on the country at 20 percent” [MSN alert]. Curiously, other outlets framed this as “dropping 90% tariff” [MyHometownToday.com alert] or “cutting tariffs on Vietnamese exports from 46% to 20%”. For those keeping score, the 20% rate, while lower than a previously threatened 46%, is actually an increase from the temporary 10% baseline tariff that had been in place. One might call it a reduction, or an increase, depending on which side of the negotiating table – or indeed, which news headline – you prefer to read.
The market’s initial reaction to this particular “deal” was, predictably, a mixed bag of emotions. Companies with significant manufacturing footprints in Vietnam, such as Nike, saw their shares initially jump by 4% following the announcement. However, as the finer print emerged, revealing the 20% tariff and a 40% tariff on goods “transshipping” through Vietnam to circumvent other duties, those early gains quickly evaporated, with shares declining sharply. It seems even the most optimistic algorithms struggle with a policy that can simultaneously be a “deal” and a tariff hike.
Despite the nuanced reality of the Vietnam agreement, the broader market indices largely shrugged off the finer details, choosing instead to focus on the mere existence of a “deal.” The S&P 500 and Nasdaq Composite, ever the optimists when a trade narrative emerges, closed at new record highs on July 2nd and July 3rd, extending a rally fueled by a general sense of “optimism about possible trade deals”. The Dow Jones Industrial Average, while slightly down by 0.02% (or 10.52 points) on July 2nd, managed to recover, adding nearly 350 points (0.8%) on July 3rd, inching closer to its own December record. It’s almost as if the market has developed a selective hearing, tuning out the specifics of trade friction in favor of the soothing hum of “deal talk.”
The 70% Hammer: A Looming August Reckoning
But just as investors were getting comfortable with the idea of a new, albeit higher, normal for Vietnamese imports, President Trump unleashed another volley of tariff threats. With a July 9th deadline looming, the administration warned that if new trade agreements aren’t finalized, tariffs could reach an eye-watering 70% on imports starting August 1st. This, he declared, would apply to “10 or 12” countries initially, with more to follow. The top tier of this new range, if formalized, would be significantly higher than the initial 50% maximum outlined in April.
This latest escalation sent a fresh wave of jitters across global markets. Reports indicated the European market was down 1.02%, the Japanese market saw a 1.91% decline this week, and the Indian market dipped 0.59%. The threat of a 17% tariff on European Union agricultural exports, targeting beloved staples like Belgian chocolate, Irish Kerrygold butter, and olive oil from Italy, Spain, and France, alone could impact a staggering $3 billion in trade flows. Analysts at Gavekal didn’t mince words, warning that a 50% flat tariff on the EU would likely compel retaliation, “potentially sparking a full trade war and market instability”. The sheer unpredictability, as noted by Capital Economics, means “uncertainty will likely persist”.
Indeed, the financial implications of these broad-brush tariff threats are not lost on market observers. A JPMorganChase Institute analysis, published July 2nd, estimated that President Trump’s current tariff plans could directly cost US employers a hefty $82.3 billion. This directly contradicts the administration’s frequent assertion that foreign manufacturers would absorb the costs, with the analysis suggesting that US companies might instead resort to price hikes, layoffs, hiring freezes, or reduced profit margins. Goldman Sachs analysts echoed this sentiment, predicting that companies would pass on 60-70% of these tariff costs to consumers through higher prices. They even forecast a deceleration in S&P 500 earnings-per-share growth to 4% in the second quarter of 2025, a significant drop from 12% in the first quarter, with tariffs being a contributing factor.
TikTok Tango: A Deal “Pretty Much” Done?
Amidst the tariff whirlwind, President Trump also chimed in on the fate of TikTok, stating on July 5th that the U.S. “pretty much” has a deal for the sale of the popular short-video app, with talks with China set to begin early next week. This announcement comes after previous attempts at a deal were reportedly put on hold due to China’s response to earlier tariff announcements. The narrative here is a familiar one: a high-stakes negotiation, a looming deadline (September 17th for ByteDance to divest US assets), and the President’s characteristic confidence in a resolution, even if China’s approval is still required. The market’s reaction to this specific piece of news was less pronounced than the broader tariff discussions, likely because the ongoing saga of TikTok’s ownership has been a long-running, albeit dramatic, show.
The Market’s Enduring Resilience (or Denial?)
Despite the constant barrage of policy shifts and escalating trade tensions, the broader U.S. equity markets have shown a remarkable, almost defiant, resilience. As of the end of June 2025, the S&P 500 had topped its all-time high and generated a total return of more than 6% year-to-date. Terry Sandven, chief equity strategist at U.S. Bank Asset Management Group, aptly summarized the situation, noting that increased capital market volatility has accompanied Trump’s second term, with investors navigating “an abundance of policy changes including tariffs, tax reform, deficit spending, the debt ceiling, border policy, and geopolitical tensions”. Yet, he observed, investors have “proven resilient despite the frequent news flow”.
This resilience, however, doesn’t negate the underlying angst. The Federal Reserve, for instance, has stated it needs more time to evaluate the impact of tariffs on the economy before adjusting interest rates. The constant uncertainty, the “on-again, off-again” nature of tariff policies, means businesses are holding off on hiring decisions until there’s more clarity on trade and tax policies.
The Film Industry’s Unscripted Drama
Beyond the major indices and broad economic forecasts, specific industries are also feeling the whiplash. The film industry, for example, found itself in an unscripted drama when President Trump announced a 100% tariff on foreign films via Truth Social back in May, claiming the US movie industry was “dying” due to foreign incentives. Industry experts were quick to point out the absurdity, calling the proposed tariffs “nonsensical” and “lacking in logic,” arguing they would actually harm Hollywood, which, ironically, runs a trade surplus. The consensus among analysts was that such measures would drive production overseas and invite retaliation against US service exports. The President later appeared to “row back” from the blunt statement, clarifying it was merely a “proposal” and he didn’t intend to harm the US film industry. A classic plot twist, leaving everyone wondering if the show will go on, or if it’s headed straight to direct-to-streaming with a 100% import duty.
In conclusion, the stock market under President Trump continues to be a fascinating, if sometimes bewildering, spectacle. It’s a testament to both the market’s underlying strength and its remarkable ability to compartmentalize chaos. As tariffs threaten to reach unprecedented levels, trade deals are announced (and then re-explained), and major tech companies face uncertain futures, investors are left to navigate a landscape where policy pronouncements can shift faster than a TikTok trend. The only certainty, it seems, is the continued, unpredictable, and undeniably entertaining, “Art of the Deal” playing out on the global financial stage.
This article is for informational purposes only and does not constitute financial advice. Investors should conduct their own research and consult with a qualified financial professional before making any investment decisions.
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.