While answering questions from reporters, Trump also said he believed trade negotiations launching this weekend with China would result in tangible progress, predicting Beijing would be willing to make concessions and saying he could consider cutting punishing tariffs against the country if there was significant momentum.
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Promising trade news paired with Republican efforts to pass legislation extending and expanding his signature tax cuts should be reason for investor optimism, the US president suggested.
“This country will hit a point that you better go out and buy stock,” Trump said. “Now, let me tell you this, this country will be like a rocket ship that goes straight up.”
Among individual stocks, Peloton Interactive shares fell 6.7 per cent after the fitness company’s revenue sank 13 per cent last quarter, marking the third consecutive year-over-year decline. Handbag maker Tapestry shares rose 3.7 per cent after the company raised its annual outlook again, defying concerns over weakening consumer sentiment and trade uncertainty.
Apple added 0.6 per cent on news its silicon design group is working on new chips that will serve as the brains for future devices, including its first smart glasses, more powerful Macs and artificial intelligence servers. Shares of drugmakers slumped following a Politico report that the Trump administration plans to revive a proposal to dramatically slash drug costs by tying the amount the government pays for some medicines to lower prices abroad.
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Still, investors remained largely focused on the flurry of trade-related news that came in. The European Union is planning to hit €95 billion ($167 billion) of US exports with additional tariffs if negotiations with Trump’s team falter. Traders are also digesting news that the administration plans to rescind some Biden-era curbs on chipmakers. Chip stocks were up strong on the news.
Even so, market watchers caution that trade deals often take years to finalise.
“Given that full trade deals take years to negotiate, this will likely be a framework, and it will be interesting to see whether the 10 per cent baseline tariff stays as that will provide an important template for negotiations with other countries and a good guide to the long-term tariff strategy of the US,” said Jim Reid, global head of macro research and thematic strategy at Deutsche Bank.
Outside of the US, the Bank of England cut interest rates by a quarter point to 4.25 per cent, citing risks from the global trade slowdown.
Bloomberg, with staff writers
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