Trade headlines are again weighing on the stock market, as President Donald Trump’s latest tariff salvo helped fuel a sell-off on Monday . Trump sent letters to several countries on Monday, detailing new tariff rates set to go into effect on Aug. 1. Those rates appear to generally be closer to the levels revealed on the April 2 “liberation day,” which spooked the market, than the milder import duties investors were hoping for. The letters also came on the heels of Trump’s threat over the weekend to hike tariffs on BRICS members . Taken together, the latest announcements from the White House seemed to dash any hopes that the tariff outlook would clear up this week or that some of the worst downside scenarios are off the table. “We have effective tax rates here that are higher than they’ve been since post-World War II, and they might get a lot worse,” Tim Seymour, chief investment officer of Seymour Asset Management, said on CNBC’s ” The Exchange .” .SPX 5D mountain The stock market retreated on Monday as the U.S. announced new tariff rates on key trading partners. Monday’s events could also lead to Wall Street taking a second look at its expectations for the U.S. economy. Mislav Matejka, a London-based strategist at JPMorgan, said in a note to clients that the U.S. could soon face a situation where tariffs are limiting economic growth and increasing prices at the same time. “The U.S. could see a stagflationary backdrop over the next [few] months, which could constrain its performance during the summer,” Matejka said in a note to clients. For all that, both the U.S. economy and the stock market have generally shaken off trade concerns since Trump returned to office. But it’s also true that some of the factors that contributed to that resilience may not work forever. “Past frontloading of orders in the runup to tariffs is likely to have a payback; there will be some weakening in consumer [spending] due to [a] squeeze in purchasing power, and even with dramatic backpedaling, the current tariffs picture is much worse than most thought at the start of the year,” Matejka said. The JPMorgan note was issued Monday before Trump’s letters were released. Citigroup U.S. equity strategist Scott Chronert on CNBC’s ” Power Lunch ” said that Wall Street’s earnings expectations will be “tested” by new tariffs but added that that is not necessarily a reason to sell out of stocks either. “The way we’re looking at it, is that you have to be a little bit wary of reading an entire index-level implication to these country-specific tariffs. They’re going to have much more direct influence on certain companies, industry groups and sectors probably than the aggregate index,” Chronert said.
