US stocks ends up, with Nasdaq hitting record. Market shrugs off Trump's tariff threats
U.S. stocks rebounded from small opening losses to close just higher, and the tech-heavy Nasdaq eked out a record high, after investors shrugged off President Donald Trump's further escalation of trade tensions.
Over the weekend, Trump announced a 30% tariff on goods from the European Union and Mexico, starting Aug. 1. Mexico and EU leaders said they would continue to negotiate this month before that date.
The EU is now preparing to step up its engagement with other countries hit by Trump’s tariffs, according to people familiar with the matter, according to Bloomberg. Other reports say the EU is considering retaliatory tariffs against the U.S. if no deal is reached and U.S. levies are enacted.
This afternoon, he also threatened 100% tariffs on Russia if there's no ceasefire with Ukraine within 50 days.
However, the market reaction has been fairly muted, not even close to the enormous swings in April when Trump first announced his tariff plan. "We have stopped speculating about the whether or not there is a longer-term strategy," said Carsten Brzeski, global head of macro at Dutch bank ING. "We only know that financial markets seem to have grown numb, while at the same time the tariff threat is still for real."
The blue-chip Dow edged up 0.2%, or 88.14 points, to 44,459.65; the broad S&P 500 added 0.14%, or 8.81 points, to 6,268.56; and the tech-heavy Nasdaq rose 0.27%, or 54.8 points, to 20,640.33. The benchmark 10-year yield inched up to 4.429%.
RBC Capital Markets raised its year-end S&P 500 target to 6,250 for its second upgrade this year. RBC cites upbeat investor sentiment and optimism about the economic outlook through 2026.
Later this week, investors will get another round of inflation data to comb through for signs Trump's tariffs are affecting consumer prices and the economy. So far, the inflation impact of the tariffs has been tame.
"Inflation pressures have remained muted so far, but tariffs will eventually feed through pushing prints higher and creating some discomfort for the Fed," said Seema Shah, chief global strategist at Principal Asset Management.
Bitcoin soars to record
Bitcoin continues to rally to record highs. The digital unit jumped above $123,000 ahead of the start of "Crypto Week" on July 14. Lawmakers will debate three key bills aimed at providing clear regulatory frameworks for digital assets, stablecoins, and blockchain technologies. Bitcoin was last up 0.71% at $119,790.70.
"The House will consider the Genius Act, the CLARITY Act, and the Anti-CBDC Surveillance State Act," said Bank of America Securties Analyst Ebrahim H. Poonawala . "We view passage of a crypto legislation as a top priority for this administration with the potential for the bills to become law within the next few months."
Fed chief under fire
Investors will also have to contend with increasing pressure on Federal Reserve Chairman Jerome Powell.
On Sunday, National Economic Council Director Kevin Hassett said Trump can fire Fed Chair Jerome Powell “if there’s cause.”
Office of Management and Budget Director Russell Vought has said Powell “has grossly mismanaged the Fed” and suggested he had misled Congress about a pricey and “ostentatious” renovation of the central bank’s headquarters. He is vowing a probe into this.
The Fed quietly posted a FAQ on its site over the weekend explaining the renovation of its headquarters and its $2.5 billion cost, and Powell reportedly has asked the inspector general to review the project.
Trump said over the weekend if Powell stepped down, that would be a “good thing.”
Corporate news
Earnings season is about to ramp up, with large banks like JP Morgan, Bank of America and Goldman Sachs set to report this week.
- Tesla plans to poll shareholders on whether to invest in xAI, chief executive Elon Musk said after the Wall Street Journal reported SpaceX will invest $2 billion into the Grok chatbot developer. Shares of the electric vehicle maker rose 1%.
- Boeing shares gained 1.65% after a preliminary report from the Air India crash probe suggested no immediate action against the planemaker.
- Kenvue's chief executive stepped down and the Board said the company's looking at strategic alternatives such as simplifying its portfolio. The Neutrogena maker's shares rose 2.18%.
- Waters agreed to merge with Becton Dickinson in a deal worth about $17.5 billion. Waters stock tumbled 13.82%.
- Fastenal said quarterly sales rose. Shares added 4.16%.
- Autodesk no longer is planning to buy PTC, according to Bloomberg. Autodesk shares rose 5.05%.
(This story was updated with new information.)
Medora Lee is a money, markets, and personal finance reporter at Paste BN. You can reach her at mjlee@usatoday.com and subscribe to our free Daily Money newsletter for personal finance tips and business news every Monday through Friday.