Happy Friday! Today we’re decoding Trump’s latest tariff announcement, Wall Street’s take on trade, how markets are responding, and more. Was this email forwarded to you? Join over 190,000 self-directed investors and sign up here.

Protectionist or bluffing?

The tariff man holds a big stick but markets aren’t convinced he’ll use it. 

President Donald Trump signed off on reciprocal tariffs on Thursday with a catch — implementation won’t happen until at least April. 

That caveat helped push the S&P 500 toward its record high by the end of the trading day, while the Nasdaq and Dow Jones Industrial Average also turned sharply higher.

Meanwhile the VIX, Wall Street’s fear gauge, tumbled. 

“They charge us a tax or tariff and we charge them,” Trump told reporters in the Oval Office, flanked by Commerce chief Howard Lutnick, whom he’s tasked with determining the tariffs each country will face. 

Investors, it seems, aren’t pricing in a full-blown trade war just yet.

In fact, the initial response seems to frame the news as more bark than bite — either markets expect Trump to strike deals before the deadline, or they believe his tariff push won’t be as damaging as feared. 

As the president’s shown in recent history, reciprocal tariffs could simply be a page from his Art of the Deal playbook rather than concrete items to follow through on. 

Then again, the whole point of holding a big stick is making sure others believe you’ll wield it if necessary. 

Trump noted in his press conference that some nations have already floated tariff cuts, though he also acknowledged that inflation could rise in the short term — a sign he isn’t afraid to do exactly what he said he would do.

“The broad scope is indicative of a maximalist starting position intended to spur concessions from trading partners, while the long lead-time is likely intended to create room for negotiations,” Goldman Sachs strategists wrote in a note Thursday. 

According to the White House, reciprocal tariffs will be determined case by case, weighing factors including VAT rates, subsidies, regulatory burdens, and “any unfair limitation on market access.” 

President Trump said more tariff announcements are coming soon on pharmaceuticals, autos and semiconductors. 

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Elsewhere:

🤝 The US and India will double bilateral trade in 5 years. President Trump met with Indian PM Narendra Modi on Thursday after the reciprocal tariffs announcement. Trump noted India’s recent move to reduce tariffs on select imports, and said he would work on a deal to address trade disparities between the two countries. (CNBC)

📈 Coinbase crushed fourth-quarter earnings. The crypto exchange handily beat Wall Street estimates thanks to higher trading volumes in bitcoin and other digital tokens to end 2024. President Trump’s victory helped drive unprecedented interest in crypto. That pushed bitcoin over the $100,000 milestone — and Coinbase benefitted in a big way. (Reuters)

📊 Huge AI demand forecasts are helping Nvidia. The stock climbed Thursday after a report predicted global shipments of AI servers are expected to grow nearly 28% year-over-year in 2025. One of Nvidia’s higher-ticket items, the GB200 NV liquid-cooled rack systems, are expected to be in high demand. (Barron’s)

Rapid-fire: 

• GameStop stock surges after reports the company is exploring buying bitcoin (CNBC)

• Shares of Applied Materials, the largest US maker of chip equipment, tumbled after the company shared a downbeat outlook (Bloomberg)

• JPMorgan’s Jamie Dimon wants to untangle the regulatory mess in the US banking system (Yahoo Finance)

• Robinhood is now up more than 440% over the last year after its 20% surge on Thursday’s strong earnings (Business Insider)

• VP Vance said Ukraine must have “sovereign independence” and Russia could face sanctions if they don’t do a peace deal (WSJ)

• China invited Jack Ma and the founder of DeepSeek to meet top Beijing officials (Bloomberg)

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