Dow futures dip as Wall Street weighs likelihood of Trump's latest tariff threat, while U.S. eyes call to resolve China trade snag
The so-called TACO trade will be tested as market respond to President Donald Trump's announcement on Friday night that he will double steel tariffs to 50%. Meanwhile, administration officials sounded upbeat that the Trump and President Xi Jinping could sort out snags in U.S.-China trade talks.
Stocks pointed slightly lower Sunday night after President Donald Trump reignited trade war fears by doubling down on steel tariffs on Friday.
The so-called TACO trade will be tested as markets wait to see if Trump will actually follow through with his latest threat or if he will put it on hold soon.
Futures for the Dow Jones Industrial Average dropped 89 points, or 0.21%. S&P 500 futures slipped 0.23%, while Nasdaq futures fell 0.31%.
The yield on the 10-year Treasury was essentially flat at to 4.442%. The dollar fell 0.21% against the euro and 0.31% against the yen.
Gold rallied 0.63% to $3,309.50 per ounce. U.S. oil prices climbed 2.1% to $62.08 per barrel despite OPEC+ agreeing to another surge in supply.
On Friday night, Trump said he will hike steel tariffs to 50% from 25%, prompting a retaliation threat from the European Union over the weekend.
The steel duty announcement came days after a U.S. trade court rule that the legal basis for Trump's reciprocal tariffs was invalid. But his tariffs on certain industries, including steel, aluminum and autos, rests on a separate order that's based on national security.
Meanwhile, administration officials sounded upbeat that the Trump and President Xi Jinping could sort out snags in U.S.-China trade talks.
That's after Trump claimed Beijing had violated an agreement reached in Geneva, Switzerland, last month, when both sides slashed their respective tariffs from prohibitively high levels. China also agreed to reopen access to rare earths, but the U.S. said it was slow-rolling compliance with the pact.
On Sunday, Treasury Secretary Scott Bessent sought to de-escalate the rhetoric, telling CBS's Face the Nation that the two heads of state could ease logjam.
'I'm confident that when President Trump and Party Chairman Xi have a call that this will be ironed out,' he said.
When asked about a timeline for a call, Bessent replied, 'I believe we will see something very soon.'
Meanwhile, markets are headed for a big week of economic data and commentary as Wall Street waits for more clues on how much tariffs are impacting the economy.
On Monday, the Institute for Supply Management's manufacturing index will come out. On Tuesday, the Labor Department will issue its job openings and labor turnover report. On Wednesday, ADP publishes its private-payrolls data. On Thursday, the Labor Department will release weekly jobless claims, ahead of its monthly jobs report on Friday.
Several Federal Reserve officials will speak throughout the week. On Monday, Chairman Jerome Powell will speak at 1 p.m. ET at a Fed conference in Washington, D.C. The Fed will also publish its beige book on Wednesday.
This story was originally featured on Fortune.com
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
CNBC
12 minutes ago
- CNBC
Sharkninja CEO: All of production can be made outside of China by yearend
Mark Barrocas, Shark Ninja president and CEO, joins 'Power Lunch' to discuss how the company's supply chain is shifting, how long it'll take to get operations insulated from China-U.S. trade tensions and much more.
Yahoo
15 minutes ago
- Yahoo
‘TACO': Wall Street traders have a coded diss that means they're betting against Trump
As has increasingly become the norm since Donald Trump first unleashed his supersized 'Liberation Day' tariffs two months ago, the markets once again saw a huge upswing on Tuesday after the president announced he was pausing the hefty import taxes he had threatened to impose on the European Union just days before. And Wall Street investors have now picked up on the president's pattern of backing down from his trade-war threats and are buying stocks accordingly, knowing that Trump's backtracking will inevitably cause a stock market rebound. They are calling them 'TACO' trades, an acronym for 'Trump Always Chickens Out.' The president was incensed on Wednesday afternoon when a reporter asked him about the new Wall Street strategy — and acronym — insisting that he was getting significant concessions from other countries with his dealmaking. 'You call that chickening out?!' Trump shot back, referencing his pause of tariffs on the European Union. 'Because we have $14 trillion now invested, committed to investing when Biden didn't have practically anything. This country was dying. We have the hottest country anywhere in the world... Six months ago, this country was stone-cold dead.' He then turned to the reporter, who was covering the swearing-in ceremony for Washington, D.C.'s new interim U.S. attorney Jeanine Pirro, and groused that she asked a 'nasty question,' adding that his constant backing down on his tariff threats was a 'negotiation' tactic. 'Don't ever say what you said. That's a nasty question,' he grumbled. 'To me, that's the nastiest question!' Financial Times columnist Robert Armstrong first coined the cheeky term, and it refers to the notion that markets will immediately tumble based on Trump's economic threats, only to jump sharply after he relents a short time later. 'It pains me to admit that Rob came up with something so witty and apt before I could think of it, but he is spot on,' Armstrong's Financial Times colleague Katie Martin wrote earlier this month. The key piece of evidence was on April 9, when the US president 'paused' the supersized tariffs that he had outlined a week before, on what he termed 'liberation day.' Markets gagged on the details and he backtracked, at least in part.' Indeed, there have been other instances over the past few weeks that have seen the president step back from the ledge after stocks reacted poorly to his ultimatums. After suggesting he would have Federal Reserve chair Jay Powell removed, he soon distanced himself from the idea after markets sank. He also agreed to temporarily roll back most of the tariffs against China as they seek a long-term trade deal, resulting in Wall Street and global markets essentially wiping out the losses that were caused by the Liberation Day tariff announcement. The same thing happened this past weekend. In a Truth Social screed, Trump threatened to raise import taxes on the European Union to 50 percent starting June 1, claiming the EU was formed 'for the primary purpose of taking advantage of the United States on trade' and the bloc 'has been very difficult to deal with.' He also fumed about the trade deficit between the United States and the EU. The market predictably dropped in response to the president's remarks. Just as predictably, Trump shifted his tone on Sunday, saying the tariffs would be delayed until July 9 because European Commission President Ursula von der Leyen had requested an extension. 'The Commission President said that talks will begin rapidly,' he added. Global markets soared on Monday and Wall Street, which was closed for Memorial Day, joined the rally on Tuesday. Meanwhile, investment experts and traders pointed out that this was now baked into the cake. 'TACO trade triumphs once again,' IG Group's Chris Beauchamp told The New York Times. 'Investors have kind of figured Trump out a little bit,' Murphy and Sylvest senior wealth adviser Paul Nolte remarked to The New York Post. 'He's like the poker player at the table that you know is making some bets and then when pressed by the other players at the table, he folds.' Exit Stage Left Advisors president Ted Jenkin added that once Trump delivers bad news, investors are now 'buying those stocks when they are beaten down, waiting for him to chicken out and watching those stocks rebound in value.' 'These retreats are so frequent that investors should rationally expect them,' Paul Donovan of UBS Wealth Management pointed out as global stocks soared on Monday. Meanwhile, economists have also noted that the 'madness' created by Trump constantly crying wolf with his economic and trade policies is unlike anything ever seen in American history. 'It was always taken as a given that when the president spoke on Monday, he would likely still mean it on Tuesday,' University of Michigan's Justin Wolfers told Barron's, adding there was no 'BACO trade' under Joe Biden. 'That's no longer true. But what's really hard is that it's not even obvious when it'll be true, and when it won't be. Madness.' Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
15 minutes ago
- Yahoo
Fox News hilariously defends Trump over ‘TACO' insult: ‘He's the bravest man in the world!'
The code that Wall Street traders are now using to describe Donald Trump's tactic of backing out of his trade policy threats whenever they cause the stock market to tumble has not only rattled the president, but has his most loyal sycophants at Fox News scrambling to defend him against the insulting nickname. With investors now engaging in 'TACO' trades, which is shorthand for 'Trump Always Chickens Out' when it comes to actually imposing his massive tariffs, Democratic lawmakers have now taken to social media to mock the president by filming themselves munching down on tacos. Amid the widespread mockery of the president by Democrats and liberal media figures, not to mention the president's own complaints about the 'nasty' term, a number of hosts and commentators at Fox News – which essentially serves as the White House's unofficial communications arm – have circled the wagons to blast the 'cringey' insult. And one way they have done that is to insist that there's no way that Trump can be seen as cowardly because there is nobody alive who has more courage than the president. 'The word chicken – one of the problems that the Democrats have had with Donald Trump is the fact that after 'fight, fight, fight,' everyone knows he is the bravest man in the world,' Fox & Friends co-host Rachel Campos-Duffy, referencing last year's assasination attempt on Trump, breathlessly declared on Tuesday. Campos-Duffy, whose husband serves as the president's transportation secretary, claimed this was all 'propaganda' to make the American people forget that Trump was 'shot in the head' at a Pennsylvania campaign rally. At the same time, though, she insisted the nickname won't stick because the public knows how courageous and unafraid the president is. 'Every man that saw that knows he is brave,' she continued. 'Bravest man in the world. They are thinking using 'taco' and the word 'chicken' on Trump somehow is going to damage or put a dent in that teflon image he has as the very brave person. Frankly, he is brave to take on tariffs!' The former Real World star was far from the only Fox News personality to fume over the acronym that Democrats and anti-Trump influencers have gleefully embraced. Specifically, the network's conservative stars have recently taken issue with Rep. Eric Swalwell (D-CA), who posted a video on his TikTok account of a staffer asking him: 'Hey, Congressman, what the f*ck is up with Trump always chickening out on tariffs?' The California lawmaker, who has long been a vocal critic of the president, merely responded by biting into a Taco Bell crunchy taco. 'The Democrats have become so lame,' Fox & Friends co-host Lawrence Jones groused in response to the video, while Campos-Duffy called out Swalwell for his 'cringey response' to Trump. Their colleague Brian Kilmeade, meanwhile, blamed the whole 'TACO' acronym on Fox's corporate cousin The Wall Street Journal, which is also owned by Rupert Murdoch. 'The Wall Street Journal was at war with the president when it comes to tariffs,' he claimed. While the Journal did eventually report on the ''TACO Trade' that has Trump fuming,' the paper wasn't the first to cover the cheeky term, which traders had been using for weeks and was initially coined by a Financial Times columnist. Elsewhere on the president's favorite morning show, former Speaker of the House and current Fox News contributor Newt Gingrich also rejected the nickname because, in his view, Trump never loses. 'This whole recent thing about 'TACO,' you know, Trump always caves. That's nuts,' Gingrich huffed. 'Here's a guy with the courage to endure the CIA and the FBI with the Russia hoax. He endures two impeachment attempts, a rigged election, two assassination attempts, four efforts to put him in jail, and his critics think that he always caves. My experience is, he almost always wins.' (Separately, it is notable that Gingrich outright called the 2020 presidential election 'rigged,' considering that Fox News paid Dominion Voting Systems $787.5 million in 2023 to settle a defamation lawsuit that alleged the network parroted Trump's baseless election fraud conspiracies.) The conservative cable giant's top opinion hosts, meanwhile, seemingly took turns the night before to find different ways to sneer at Swalwell's video while insisting that the derisive epithet is not gaining any traction. 'I want to point out that we like tacos. That's why this doesn't work. We like tacos,' Fox News resident 'comedian' Greg Gutfeld exclaimed on The Five before referencing Swalwell's alleged ties to a Chinese spy. 'Eric Swalwell should have been doing Chinese food — his chopstick was found in a wonton,' Gutfeld snarked. The FBI never accused the lawmaker of any wrongdoing, and a House Ethics probe concluded without taking any further action against the congressman. Gutfeld wasn't the only pro-Trump Fox host to invoke the Chinese spy allegations while blasting Swalwell's video. 'I wonder if Fang Fang likes the burrito bowl,' Laura Ingraham chuckled on Monday night. 'The left's weird moment goes to Fang Fang Swalwell, who posted this video on TikTok on Trump's tariffs,' Trump confidant and 'shadow White House chief of staff' Sean Hannity proclaimed before airing the clip. 'Maybe somebody needs to tell Mr. Fang Fang that the Atlanta Fed is predicting 4.6 percent growth in the second quarter.' Still, while Fox's top Trump loyalists were going out of their way to talk about how much they 'like tacos' and therefore the sobriquet won't actually hurt the president, other voices on the channel pointed out that this is something that could break through with the public. 'It's totally fair game,' National Review editor Rich Lowry said on the Sunday broadcast of MediaBuzz. 'And apparently Trump was irritated in part because he hadn't heard it, and afterwards was irked with his aides not telling him about this.' Lowry added: ''TACO,' it's catchy, kind of funny, and gets to a real phenomenon with the tariffs, which he's backed off them.'
