Markets took a beating after President Donald Trump reimposed 25% tariffs on Canada and Mexico. Stocks tumbled, businesses braced for impact, and consumers worried about rising prices. But just as panic set in, U.S. Commerce Secretary Howard Lutnick hinted at possible tariff relief. Investors held their breath, and stocks staged a late-day rebound.
The S&P 500 and NASDAQ, which had plunged early in the day, saw futures rise after Lutnick’s comments. Traders saw hope that Trump might ease up, though he made it clear that Canada and Mexico would need to step up their game on crime and drug control. The stock market remains volatile, with investors unsure of what’s coming next.
Stock Markets Bounces Back After a Rough Start
Wall Street traders had a wild day. Stocks opened lower as investors reacted to Trump’s aggressive trade stance. The S&P 500 and NASDAQ futures initially dropped, and the Dow Jones shed over 650 points.
Then came Lutnick’s statement. He suggested Trump might roll back some tariffs if Canada and Mexico agreed to tougher measures. Investors saw this as a sign that the White House was open to compromise. Stock futures reversed course. By the end of the day, the S&P 500 climbed 0.7%, while the NASDAQ added 0.8%.
Even with this recovery, uncertainty remains. Businesses dependent on cross-border trade are still at risk, with rising costs threatening to eat into profits. The auto and construction industries, in particular, face serious challenges. Prices for cars and homes could jump as key materials become more expensive due to tariffs.
Crypto Markets Holds Strong as Bitcoin Rebounds
While stocks struggled, Bitcoin and the broader crypto market found their footing. After a rough week, Bitcoin (BTC) surged past $87,000, gaining 4% intraday. Ethereum (ETH), Solana (SOL), and XRP also rallied, erasing some of their recent losses.
The crypto sector initially reacted negatively to the trade war fears, as investors pulled cash from riskier assets. But after Lutnick’s comments, sentiment shifted. Traders saw the possibility of a trade deal as a bullish signal. Crypto markets gained nearly 4.5% on the day, and liquidations cooled off from the previous day’s billion-dollar wipeout.
Crypto whales made big moves, with Japanese investment firm Metaplanet acquiring 497 BTC, worth $43.9 million. Meanwhile, Trump himself reportedly holds over $500 million worth of Ethereum, which sparked optimism among investors. The market appears to be adjusting to the ongoing economic uncertainty, using crypto as a hedge against traditional financial risks.
Gold Steadies as Inflation Concerns Rise
Gold prices remained stable, reflecting investor anxiety over trade tensions. With tariffs increasing costs for American consumers, fears of inflation are growing. Gold, often seen as a safe-haven asset, held near its record high.
The SPDR Gold Shares ETF (GLD) gained 0.87%, as traders looked for stability amid stock market swings. With central banks worldwide preparing for potential economic slowdowns, gold remains a strong alternative for those hedging against further financial turmoil. If trade tensions continue to escalate, gold could see even greater demand in the coming weeks.
The Bigger Economic Picture: Tariffs, Trade Wars, and Uncertainty
The consequences of Trump’s tariffs go beyond the stock market. American businesses are facing higher costs, which will inevitably be passed down to consumers. The U.S. imports nearly half of its foreign oil from Canada—tariffs on this supply could drive up gas prices. Grocery bills will also rise, with fresh produce from Mexico getting hit hard.
The auto industry is among the biggest losers in this trade war. Ford, General Motors, and Stellantis are already calculating how to offset higher costs. Some estimates suggest that tariffs could add nearly $6,000 to the price of a new car.
Meanwhile, Canada and Mexico aren’t sitting back. Both countries hit back with their own retaliatory tariffs on American goods. Canada imposed levies on $30 billion worth of U.S. exports, with plans to expand them further. Mexico is also preparing its own countermeasures, particularly targeting U.S. agriculture.
While markets have partially recovered from the initial shock, the full impact of these tariffs is still unfolding. Investors will be closely watching Trump’s next moves, as well as how Canada and Mexico respond in the coming days. The markets may have bounced back for now, but the uncertainty isn’t over yet.