I've Got Good News and Bad News After Trump's Tariff Announcement

For the third day in a row, the market mood was gloomy to start, but the buyers stepped up and delivered a decent rally. Wednesday was a little different because investors were awaiting the Trump tariff decision, and there was hesitation to load up before the news hit.

The president is outlining his tariff programs, which impose a baseline tariff of 10% on all countries and reciprocal tariffs that are about half of whatever the other country is charging. These are sizable tariffs and higher than what many have expected. In the case of China, the tariff rate will be 34%, and the European Union will be charged 20%.

The market is dropping sharply after-hours on the news and has completely wiped out the gains during the regular session. Some market players were hopeful that the news would be a case of "better than feared," but it turns out there are worse than feared.

Trump has been under a tremendous amount of pressure to go easy, but if he isn’t tough, he will have less negotiating room. The tariffs he is announcing are very likely just the starting point in intense negotiations. Treasury Secretary Bessent has stated that these tariffs set a cap and can be negotiated down from here.

The good news is that some of the uncertainty has been lifted. The bad news is that there are likely to be strong responses from many other countries. There will likely be constant negotiations, which will keep market volatility elevated.

Now that we know what the tariffs will be, we will be able to focus more on stocks that may be safe havens. It is going to be rocky for a while, but at least the process has started, and there will be the potential for some good news as things develop.

Have a good evening. I’ll see you Thursday.

At the time of publication, Rev Shark had no positions in any securities mentioned.