Markets Climb as Investors Navigate Tariff Uncertainty

US stocks posted gains Thursday, with the Dow Jones Industrial Average rising as investors appeared to look past escalating global trade tensions sparked by new US tariff announcements.

The Dow gained 186 points, or 0.4%, led by strength in industrial and consumer stocks. The S&P 500 edged up 0.1%, while the Nasdaq Composite dipped 0.1% after briefly hitting a new all-time high earlier in the session.

The market movement came after President Donald Trump announced that the US will impose a 50% tariff on imported copper starting August 1, citing the need to protect domestic industry. He also unveiled a 50% tariff on Brazilian imports, linking the move to what he called an “unfair trade relationship” and political developments in Brazil, where former President Jair Bolsonaro is on trial.

Brazilian President Luiz Inacio Lula da Silva said Brazil would respond in kind, invoking the country’s reciprocity laws. The iShares MSCI Brazil ETF (EWZ) fell nearly 2% on the news.

These measures are part of a broader expansion of the administration’s trade policy. Earlier in the week, Trump sent formal notices outlining new import tariffs on at least 21 countries, including Japan and South Korea, with new rates expected to take effect next month unless new agreements are reached.

Despite the heightened trade rhetoric, market sentiment remained resilient. Analysts say investor optimism tied to artificial intelligence innovation and solid corporate earnings is helping offset some concerns over global trade disruptions.

The recent tech rally, led by AI stalwarts like Nvidia, has continued to buoy sentiment. Nvidia briefly reached a $4 trillion market cap on Wednesday, pushing the Nasdaq to a record high.

“AI might be exactly what is needed to counteract any price increases from the tariffs,” said Jeremy Siegel, professor of finance at the Wharton School.

In corporate news:

• Delta Air Lines jumped more than 11% after reinstating its full-year profit outlook and beating second-quarter earnings expectations.

• MP Materials, the only rare earth miner in the US, surged over 50% after announcing a new investment from the Pentagon that will make the Defense Department its largest shareholder.

• WK Kellogg shares climbed following reports of a potential acquisition by Italian confectionery giant Ferrero.

• Estée Lauder rose nearly 6% after Bank of America reinstated coverage with a “Buy” rating, citing improving demand in Asia.

The Labor Department reported that weekly jobless claims fell unexpectedly to 227,000, below estimates and indicating continued resilience in the labor market. However, continuing claims rose to 1.96 million, the highest since late 2021, suggesting some persistence in long-term unemployment.

Meanwhile, Bank of America analysts warned that the wave of new tariffs could lead to a short-term acceleration in inflation. Still, minutes from the latest Federal Reserve meeting showed policymakers expect tariff-related price pressures to be “modest and temporary,” keeping the door open for possible rate cuts later this year.

While trade tensions remain a key risk, analysts say strong fundamentals, particularly in the tech and industrial sectors, are helping support market momentum. Deutsche Bank also noted signs of recovery in M&A activity and initial public offerings, suggesting continued investor appetite for risk.

For now, markets appear to be balancing short-term uncertainty around tariffs with longer-term optimism about innovation and corporate performance. As one analyst put it:

“Investors are watching the trade headlines, but they’re still buying the growth story.”

CNBC and USA Today contributed to this report.