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Markets moved higher in mid-day trading Wednesday, with the S&P 500 index hitting a new record high on renewed optimism around President Donald Trump’s trade policies.
The S&P 500 was up 0.81%, briefly trading above 6,100 and beating a prior record hit at the tail end of a market rally in December. The Dow Jones Industrial Index also gained 127 points, and the Nasdaq index climbed 1.5%.
Trump said Tuesday that he plans to impose a 10% tariff on Chinese imports into the U.S. starting Feb. 1 “based on the fact that they’re sending fentanyl to Mexico and Canada,” he told reporters at the White House.
The U.S. is China’s largest single-country trade partner, alone making up about 16% of imports and exports to China.
In a post on Truth Social, his social media platform, the president said Wednesday that he would impose “high levels” of sanctions and tariffs on Russia if President Vladimir Putin doesn’t reach a deal to end the war with Ukraine.
The renewed threats come after the president called for tariffs on some of America’s largest trade partners. Trump said he plans to hit Mexico and Canada with tariffs of as much as 25% as soon as Feb. 1, saying that the countries haven’t met the criteria he laid out for them.
“We’re thinking in terms of 25% on Mexico and Canada, because they’re allowing vast numbers of people” across the border, along with fentanyl, Trump said Monday night in response to questions from reporters in the Oval Office.
Economists at Goldman Sachs (GS-0.36%) have noted, however, that Trump’s comments about China have been “notably less hawkish than during the presidential campaign or even his more recent comments since the election.”
The more moderate tone appears to reflect recent diplomatic progress. Trump and Chinese President Xi Jinping discussed trade, TikTok, and fentanyl during a call on Friday, Trump said in a Truth Social post.
Trump has also refused to rule out implementing tariffs to help the U.S. buy Greenland from Denmark, make Canada part of the U.S., and acquire the Panama Canal.
In an interview with CNBC (CMCSA+0.50%), JPMorgan Chase (JPM+0.01%) CEO Jamie Dimon said that when it comes to tariffs, people need to “get over it” — even if they cause prices to go up in the short term.
“If it’s a little inflationary, but it’s good for national security, so be it. I mean, get over it,” Dimon said during an interview at the World Economic Forum in Davos, Switzerland. “National security trumps a little bit more inflation.”