Trump tariffs rattle Wall Street — here's what the movers and shakers are talking about
Published On Feb 2, 2025, 2:24 PM
President Trump has implemented new tariffs of 25% on imports from Canada and Mexico, and 10% on imports from China, intended to address issues like public health and immigration. These tariffs will begin on February 4, creating immediate concern among investors about potential economic repercussions, including higher inflation and slower growth in the U.S. Morgan Stanley and EvercoreISI economists have warned that these tariffs could increase U.S. inflation by 0.3% to 0.6% and reduce GDP growth by up to 1.1% over the next several quarters. Analysts predict strains on U.S.-China relations and changes in sourcing for companies affected by these tariffs, impacting sectors such as metals and mining.
Stock Forecasts
SPY
Negative
U.S. inflation is expected to rise due to tariffs leading to higher import costs, which may hurt consumer spending and decrease overall economic growth. This could create a negative environment for companies that rely heavily on international trade and imports, particularly in sectors tied to manufacturing and consumer goods.
AA
Negative
Companies like Alcoa (AA) and GrafTech (EAF) may face substantial risks due to their reliance on Canadian and Mexican operations, while Cleveland Cliffs (CLF) may see earnings pressure due to reduced demand or costs related to these tariffs. Investors should approach these stocks with caution as operational disruptions or cost increases could significantly impact earnings.
NVDA
Negative
Tech stocks, particularly those like Microsoft and Nvidia, which were previously enjoying a bull market, may see increased volatility and sell-offs as investors reassess growth potential under the new tariff regime that could dampen overall economic outlooks.
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