Trump’s administration is shifting to a broader tariff strategy, moving from plans for individual deals to sending letters to multiple countries Friday, reinforcing the market’s caution. Earlier, Trump announced reciprocal tariffs between 10%-50%, later lowering most to 10% until July 9 to allow negotiations, increasing traders’ focus on potential trade escalations.
Trump Tax Cuts and U.S. Job Data Stir Market Sentiment
Trump’s tax-cut legislation cleared its final Congressional hurdle Thursday, making 2017 tax cuts permanent, funding immigration enforcement, and adding new campaign-promised tax breaks. Traders are monitoring the fiscal backdrop, with uncertainty over the longer-term budget impact providing underlying support for gold.
Meanwhile, U.S. nonfarm payrolls for June showed stronger-than-expected headline growth, but nearly half the gains came from government hiring, with private sector job growth the slowest in eight months. This mixed data adds complexity to the Federal Reserve’s rate path outlook.
“The latest payrolls support a slowing economy without stalling, reducing the immediate pressure on the Fed to cut rates,” said Giovanni Staunovo at UBS.
