Trumponomics: Stocks soar to new records after US inflation data and the prospect of a rate cut

Doubts from the left about whether markets would trust Donald Trump’s economic data after the departure of the previous economic adviser have largely been swept aside by a surge in the markets. Following the release of U.S. July inflation data, which beat analysts’ expectations, both the U.S. and Tokyo stock markets hit new records. Prices remaining steady despite Trump’s tariff measures have cleared the way for the Federal Reserve to cut interest rates, encouraging investors to buy on Tuesday.

The Nasdaq (+1.39%) and S&P 500 (+1.14%) hit new record highs, closing at 21,681.90 and 6,445.76 points, respectively. The Dow Jones rose 1.10%. Shortly afterward, Japan’s Nikkei surpassed the 43,000-point mark for the first time.

Trump brags about data

Trump celebrated some of this data on his Truth Social account through several posts. In one, he highlighted the records set by the U.S. stock markets, while in another, he emphasized the success of his economic policies—particularly the tariffs.

"Trillions of Dollars are being taken in on Tariffs, which has been incredible for our Country, its Stock Market, its General Wealth, and just about everything else. It has been proven, that even at this late stage, Tariffs have not caused Inflation, or any other problems for America, other than massive amounts of CASH pouring into our Treasury’s coffers. Also, it has been shown that, for the most part, Consumers aren’t even paying these Tariffs, it is mostly Companies and Governments, many of them Foreign, picking up the tabs."

Settling scores with Goldman Sachs for their "bad prediction" on tariffs

The president also took the opportunity to settle scores with Goldman Sachs and its CEO, David Solomon, criticizing what he called “a bad prediction both about the market’s reaction and the tariffs themselves.” Trump even suggested that Solomon “get a new economist” or “focus on being a DJ.”

"David Solomon and Goldman Sachs refuse to give credit where credit is due. They made a bad prediction a long time ago on both the Market repercussion and the Tariffs themselves, and they were wrong, just like they are wrong about so much else. I think that David should go out and get himself a new Economist or, maybe, he ought to just focus on being a DJ, and not bother running a major Financial Institution."

Analysts: "Nothing seems to be stopping the Fed from cutting interest rates in September"

Analysts, while not as outspoken as Trump, also noted that the fact the trade war has not significantly impacted inflation has been key to the strong stock market performance. Speaking to AFP, Angelo Kourkafas of Edward Jones said that after reviewing the consumer price index (CPI) data, “the market breathes a sigh of relief that the feared impact of tariffs was less evident in July’s figures than in June’s.”

“As a result, nothing seems to prevent the Fed from cutting its interest rates in September,” Kourkafas said, referring to the next policy meeting. This view is widely shared among analysts, most of whom expect the U.S. central bank to reduce rates by a quarter percentage point by the end of the northern summer.