Trump's Import Tax Induced Macroeconomic Uncertainty Weighs on Investor Sentiment

Barry Adams
05 Jun, 2025
New York City

Stocks struggled to advance amid elevated trade tensions causing macroeconomic uncertainty. 

The S&P 500 index declined 0.2%, and the tech-heavy Nasdaq Composite fell nearly 0.3%. 

Investors turned cautious after the release of ADP's private payrolls data yesterday, raising stakes for the nonfarm payrolls data on Friday.

Economists are estimating nonfarm payrolls to expand by 110,000 in May, which would be about 67,000 less than in the previous month.

Benchmark indexes are on track to gain this week, amid expectations of the U.S. president backing down from its demand for sky-high tariffs on goods imported from China and the European Union. 

The so-called TACO trade, Trump Always Chickens Out, has powered a rally in benchmark indexes from the lows reached on April 7. 

Small businesses across the country are struggling to make ends meet amid Trump's erratic trade policy, which is causing severe damage to supply chains and whiplashing consumer sentiment. 

 

U.S. Trade Deficit in Goods and Services Plunged in April

The U.S. trade deficit shrank 55% to $61.3 billion after imports plunged 16.3% to $351 billion and exports rose 3% to $289.3 billion, the Bureau of Economic Analysis reported Thursday. 

The decline in deficit was driven by the fall in imports after businesses front-loaded orders in the previous month ahead of Trump tariffs. 

The imports of pharmaceutical preparations, intermediate engineering goods, cell phones, and passenger cars declined sharply from the previous month. 

The trade deficit with China declined to $19.7 billion from $24.2 billion in March, and with the European Union, it plunged to $17.9 billion from a whopping $48 billion, respectively. 

Year-to-date, the goods and services deficit increased 65.7% to $179.3 billion from the same period a year ago. 

Exports increased 5.5% to $58.4 billion, and imports increased 17.8% to $237.8 billion from a year ago, respectively. 

 

Commodities, Currencies, Indexes, Yields

The S&P 500 index decreased 0.2% to 5,960.15, the Nasdaq Composite edged down 0.2% to 19,423.74, and the Russell 2000 index declined 0.02% to 2,097.98.

The yield on 2-year Treasury notes edged lower to 3.86%, 10-year Treasury notes increased to 4.36%, and 30-year Treasury bonds declined to 4.85%.

WTI crude oil increased $1.09 to $63.94 a barrel, and natural gas prices edged higher by $0.02 to $3.73 a thermal unit.

Gold increased by $14.52 to $3,387.70 an ounce, and silver edged up by $1.43 to $35.90.

The dollar index, which weighs the US currency against a basket of foreign currencies, decreased by 0.39 to 98.39 and traded at the lowest level since April 2022.

 

U.S. Stock Movers 

Five Below Inc. jumped 10.5% to $134.0 after the low-priced goods retailer reported better-than-expected first-quarter results and guided second-quarter results. 

In the fiscal first quarter, the discount retailer posted adjusted earnings per share of 86 cents on revenue of $971 million. 

MongoDB Inc. soared 18.9% to $237.0 after the database company reported better-than-expected quarterly results and lifted its 2026 outlook. 

PVH Corp. dropped 12.1% to $71.0 after the apparel maker lowered its current quarter for earnings per share, citing tariff impacts.

Meanwhile, the company's fiscal first quarter results surpassed analysts' expectations. 

Verint Systems soared 18.9% to $21.78 after the consumer engagement platform operator reported better-than-expected adjusted earnings per share of 29 cents on revenue of $208 million. 

Circle Internet Group priced its initial public offering at $31 a share, giving the stablecoin issuer a market cap of $6.8 billion. 

The company's offering price surpassed the filing range of between $27 and $28 per share.