US Stock Market: US President Donald Trump on Tuesday doubled down on his trade policy even as American stocks tumbled, insisting that tariffs remain essential for the country’s economic strength. His remarks came after a federal appeals court declared most of his tariffs unlawful.
“The stock market is down because of that, because the stock market needs the tariffs and wants them. If you took away tariffs, we could end up being a third world country,” Trump told reporters.
Wall Street starts September in red
US stocks closed sharply lower at the start of September, a month often associated with weak performance for equities. The Dow Jones Industrial Average fell 249.07 points, or 0.55 per cent, to finish at 45,295.81. The S&P 500 shed 0.69 per cent to settle at 6,415.54, while the Nasdaq Composite slid 0.82 per cent to 21,279.63.
Technology shares led the decline, with Nvidia dropping 2 per cent and Amazon and Apple losing around 1 per cent each. Investors appeared to be taking profits after a summer rally that saw the S&P 500 notch five all-time highs in August.
Court rules tariffs ‘illegal’
The downturn followed last week’s ruling by the US Court of Appeals for the Federal Circuit, which found that most of Trump’s sweeping global tariffs were unconstitutional. The court concluded, in a 7-4 decision, that only Congress has the authority to impose such levies.
Trump swiftly criticised the verdict as “highly partisan” and vowed to appeal to the Supreme Court. A reversal could expose the US government to refund claims for billions of dollars collected from businesses since the tariffs were imposed.
Meanwhile, adding to Wall Street’s concerns, US Treasury yields rose sharply on Tuesday. The 10-year yield climbed to 4.27 per cent, while the 30-year yield approached 5 per cent. Higher borrowing costs raised alarm over the government’s fiscal position, particularly if tariff revenues must be repaid.
Bond investors fear that a refund of tariff proceeds could worsen the US deficit, undermining confidence in Washington’s fiscal management.
Despite the gloomy start to September, market experts noted that Wall Street had enjoyed a strong August, with the S&P 500 rising nearly 2 per cent and breaking through 6,500 for the first time.
The next key test will be Friday’s release of the August jobs report, which could shape the Federal Reserve’s mid-month decision on interest rates.
