Why some investors are calm about Trump's tariffs
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In today's big story, stocks tumbled following Trump's latest tariff announcement. Some investors have a reason to remain calm.
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What's on deck
Markets: These "pain trades" could creep up on investors in the second half of the year, HSBC said.
Business: In the age of Ozempic, shrinkflation has hit the fashion industry.
But first, investors are hungry for one thing: the TACO trade.
The big story
TACO TuesdayIt was another turn of the screw for US stocks.
On Monday, US President Donald Trump renewed his threat to hit major trading partners with steep "reciprocal" tariffs unless they can broker a deal before August. Stocks tumbled in response, with the S&P 500 dropping almost 1%.
The latest round of tariffs traces back to Trump's original package unveiled in April, which he delayed for 90 days to make room for negotiations. He extended that grace period, initially set to expire this week, until August 1.
How strict is that new timeline? Trump: "I would say firm, but not 100% firm. If they call up and they say we'd like to do something a different way, we're going to be open to that."
So, what's changed?
On Monday, Trump posted letters on social media to Japan, South Korea, and 12 other nations informing them that they will face tariffs of at least 25% starting in August. More countries are expected to receive letters of their own in the coming days.
The rates they are facing are largely in line with what was initially announced, making the latest move look like a play for time to secure more favorable trade deals. As BI's Brent Griffiths writes, Trump was nowhere near the pace of the 90 deals in 90 days goal, so he added more time to the clock.
There's a glimmer of hope for the markets: TACO Tuesday.
The TACO acronym — short for Trump Always Chickens Out — caught on with investors because of how frequently Trump has pivoted from policies that roiled markets.
When Trump has backed down, investors have piled into stocks. That's what helped push the S&P 500 back to all-time highs after a near-20% drop from February to April.
Now, investors are waiting to see if Trump walks back his latest threats, BI's William Edwards writes.
3 things in markets
1. A little-known crypto miner surged 3000% in a week. Shares of BitMine Immersion Technologies rocketed after the firm raised $250 million to add Ethereum to its balance sheet. It is following the playbook Michael Saylor used to build a bitcoin treasury reserve.
2. Beware of these "pain trades," HSBC says. The bank sees a risk that markets may not react to headwinds, like tariffs, in the way that most Wall Street investors are expecting. In a note to clients, HSBC found three major "pain trades" it sees potentially affecting investors.
3. Tesla investors' message to Musk: Stay out of politics. Tesla's stock price plunged on Monday after Elon Musk said he'd create a new political party, and investors were not happy about it. Analysts said in a note that they expected investors to " only see downside from his dip back into politics."
3 things in tech
1. Amazon's Rufus just turned one year old. When Amazon introduced AI shopping assistant Rufus one year ago, BI's Katie Notopoulos didn't find it that helpful. Ahead of Amazon Prime Day, Notopoulos gave it another try. Here's what she thought.
2. One of Google's brightest stars is a 27-year-old AI hypeman. Logan Kilpatrick helped launch ChatGPT at OpenAI and now runs Google's AI Studio, often promoting its tools on X. He told BI why he's available around the clock to help developers use Gemini, Google's AI chatbot.
3. It's a good time to buy an EV. The clock is ticking on the $7,500 electric-vehicle tax credit, thanks to Trump's "Big Beautiful Bill." The credit is set to expire on September 30, which makes this summer prime time to buy an EV if you can afford it, auto industry analysts told BI.
3 things in business
1. The disappearance of plus-size clothes. Thin is back thanks to the rise of Ozempic, but fashion brands that forayed into the plus-size market were already backing off. Weight-loss drugs have become a convenient excuse for the fashion industry to cut back on sizing options, BI's Emily Stewart writes.
2. Elon Musk isn't the first businessman who's tried to start a third political party. Though if history is any indication, Musk will be shooting for the moon. Billionaires Howard Schultz and Ross Perot have also tried to challenge America's two-party system, but no dice.
3. US TikTok creators may soon need a US-only version of CapCut. TikTok's parent company, ByteDance, plans to shift American users to a US-specific version of its video-editing app CapCut, per documentation seen by BI. It could be part of a broader plan to comply with a 2024 divest-or-ban law.
In other news
Trump trade advisor bashes Tim Cook for Silicon Valley's ' longest-running soap opera.'
Eight things you should never talk about at work, according to etiquette experts.
China wants to challenge Airbus and Boeing and shake up global aviation. Here's what you need to know about its upstart planemaker, Comac.
Figma investors say going public is a better outcome than its abandoned Adobe deal.
From interns to insiders: How two Balyasny summer recruits landed full-time roles at the $25 billion hedge fund.
Patriot air defenses have become top weapons — and top targets.
Inside the political reckoning shaking up the ad industry.
A big change to student loans in Trump's spending bill could make it harder to become a doctor or lawyer.
What's happening today
Allen & Company Sun Valley Conference — also known as "summer camp for billionaires" — begins in Idaho. Guests reportedly include Mark Zuckerberg, Jeff Bezos, and Sam Altman, among others.
Boeing announces Q2 deliveries.
It's Amazon Prime Day.
Hallam Bullock, senior editor, in London. Akin Oyedele, deputy editor, in New York. Grace Lett, editor, in New York. Amanda Yen, associate editor, in New York. Lisa Ryan, executive editor, in New York. Ella Hopkins, associate editor, in London. Dan DeFrancesco, deputy editor and anchor, in New York (on parental leave).
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