Dow, S&P 500 Edge Up

Investors encouraged President Trump’s fare reductions and deals with China and the United Kingdom commercial partners, but Wall Street states that the fares are still relatively high.

“The United States Effective Effective Rate is still significantly higher than it was at the beginning of the year,” wrote Solita Marcelli, Investment Director of America at the UBS Global Wealth Management, wrote on Thursday in a client note.

Marcelli pointed out the United States’s effective rate, about 15%, is now six times higher than the 2.5% rate that prevailed in January before President Trump returned to the White House.

This means that the rates rolled up during the 90 -day pause announced last month can remain beyond the term.

“Because the Trump administration has stated that the 10% initial rate is unlikely to be negotiated lower, these higher rates could stop the United States economy and increase prices,” said Marcelli.

The comments this morning of the retail giant Walmart (Wmt) The CEO Doug McMillon emphasizes this risk.

“We will do our best to keep our prices as low as possible, but, given the magnitude of the rates, even at the reduced levels announced this week, we cannot absorb all the pressure given the reality of the narrow sales margins,” said McMillon in launching the company’s results. He added to the earnings call that the rates have already caused a price increase in April and May.

The fare impact could return to the stock market.

“Although we continue to wait for several commercial agreements to endure the rate rate at approximately the level during the pause period, the continued uncertainty could trigger other volatility in the market,” said Marcelli.