S&P 5,000: Wall Street finally knows where the 'Trump put' is
The latest turn in the global trade war saga gave investors insight into where the elusive “Trump put” is. President Donald Trump announced a 90-day pause on tariffs targeting goods from most countries, except China. The news sparked a historic market rally. The S & P 500 on Wednesday had its third-largest gain since World War II, soaring 9.5%. The Dow Jones Industrial Average surged nearly 3,000 points, or 7.9%. The Nasdaq Composite rallied 12.2%, its second-largest one-day gain on record. The announcement came as markets continued to struggle, as escalating trade worries dented investors sentiment and raised worries of a recession. It also came as investors lost faith that the Trump put — a level at which the president would intervene and stem a market drop — was in place. Wednesday’s events confirms there is such a put, and where it is. “The ‘Trump Put’ is struck at S & P 5,000. That was the index’s level [Wednesday] morning when he posted on social media ‘THIS IS A GREAT TIME TO BUY!!!'” wrote Nicholas Colas, co-founder of DataTrek Research, in a note to clients. .SPX 5D mountain SPX 5-day chart “Readers with long memories may recall that President Obama made a similar ‘market bottom’ call in March 2009, under equally volatile conditions, just 6 days before a major bear market low.Investors at the time considered that observation important, and no doubt they will do so again now,” he said. Wednesday’s spike higher left the S & P 500 at 5,456.90 by the close. But while the Trump put gives investors some much-needed confidence, market volatility is likely to persist. China wasn’t included in the 90-day tariff pause. In fact, Trump raised tariffs on Chinese imports to a whopping 125%. And, as JPMorgan traders point out: “Does this change anything economically? Not exactly. Seemingly these moves focused/re-focused the trade war solely on China but, sectoral tariffs remain in place with Pharma and Semis still to be announced. This move actually increases the average tariff rate. Further, the 90-day delay does not decrease uncertainty for business owners/C-Suite, so capex will not move higher. If this was the endgame for Trump, where are the manufacturing jobs?” Bottom line: Wall Street now knows where the Trump put is, but a straight climb back to the February record is unlikely. Elsewhere Thursday morning on Wall Street, three analysts cut their price targets on Tesla , as worries around the electric vehicle maker increase. According to LSEG, the average price target stands at $313.14, suggesting shares could rise 15% from where Telsa stock is trading. “While lower estimates for 2025 are now more broadly expected, we believe the whole trajectory of earnings for TSLA remains too high and could face negative revisions post 1Q25 results,” UBS analyst Joseph Spak, who has a sell rating on the stock, wrote. “Further, we’d highlight some risk to Tesla Energy from the China tariffs.” Get Your Ticket to Pro LIVE Join us at the New York Stock Exchange! Uncertain markets? Gain an edge with CNBC Pro LIVE , an exclusive, inaugural event at the historic New York Stock Exchange. In today’s dynamic financial landscape, access to expert insights is paramount. As a CNBC Pro subscriber, we invite you to join us for our first exclusive, in-person CNBC Pro LIVE event at the iconic NYSE on Thursday, June 12. Join interactive Pro clinics led by our Pros Carter Worth, Dan Niles, and Dan Ives, with a special edition of Pro Talks with Tom Lee. You’ll also get the opportunity to network with CNBC experts, talent and other Pro subscribers during an exciting cocktail hour on the legendary trading floor. Tickets are limited!
