Stocks Continue to React to Ongoing Trade and Tariff Concerns

Another week in the nation's capital, another week of talk of trade wars and immigration. Here is a look at what is happening in the world of politics in recent days.

Rocky Week in the Stock Market

The ongoing trade wars resulted in another week of uncertainty on Wall Street. Wednesday was a particularly volatile day in the markets following a warning issued by Federal Reserve Chair Jerome Powell. Speaking at an event in Chicago, Powell said that the tariffs put in place by President Donald Trump will create more volatility throughout the markets. Powell also wanted that the tariff war will trigger even higher levels of inflation and slower growth in the domestic economy.

Not surprisingly, investors reacted to Powell's pessimism by pulling back in the markets. The blue-chip Dow finished the trading day down 700 points, or a loss of 1.73%. The S&P 500 fell by 2.24% by the closing bell while the Nasdaq Composite tumbled 3.07%.

Trump took to social media the next morning to call for the termination of Powell. The president criticized the chair for not cutting interest rates quickly enough.

One silver lining in the markets this week came when the U.S. Department of Commerce announced that consumer spending was up significantly in March. The increase in spending came as Americans made big purchases in advance of the expected tariffs.

Latest News on Tariffs

It is becoming increasingly difficult to keep up with all of the tariff news. The U.S. Customs and Border Protection agency posted a notice late last Friday stating that electronics will now be exempt from the tariffs. The exemptions apply to products such as smartphones, computer monitors, and more. The latest changes are good news for American companies such as Apple.

The news came on the same day that Chinese officials issued a warning stating that the U.S. tariffs could cause a humanitarian crisis around the world. Chinese Commerce Minister Wang Wentao issued the warning during a conversation with the director-general of the World Trade Organization.

European Central Bank Cuts Interest Rate as a Result of Trade War

The ongoing tariff concerns are not limited to the U.S. On Thursday, the European Central Bank (ECB) cut its primary interest rate by a quarter of a percentage point. The ECB statement cited the growing concerns over trade triggered by President Trump's tariffs. This central bank joins several other global economic institutions that are warning that the tariffs could hurt international business.

The rate for the ECB now sits at 2.25%. This is the seventh-rate reduction for this bank in the past year.

The rate cut by the ECB came the same day that President Trump welcomed Italian Prime Minister Giorgia Meloni to the White House. Not surprisingly, the discussion centered around trade issues. Trump relayed to Meloni that he was confident that his country would be able to work out a deal with the European Union (EU) prior to the end of the current 90-day pause on the tariffs.

President Trump Hosts President of El Salvador

The biggest headline of the week in Washington, D.C. and around the country surrounded the mistaken deportation of a Maryland man to a prison camp in El Salvador. President Trump hosted El Salvador’s President Nayib Bukele on Monday in the Oval Office. While Trump admitted that Kilmar Armando Abrego Garcia was inadvertently deported without cause, he reiterated that it is up to the El Salvadoran authorities to return him to the U.S.

Sen. Chris Van Hollen of Maryland traveled to El Salvador on Wednesday to meet with El Salvador’s Vice President Félix Ulloa. Van Hollen said that he was not able to visit Abrego Garcia in prison during the trip. The Democratic senator also accused the Trump administration of lying about the imprisoned man's gang affiliations in an attempt to cover up the accidental deportation.

Supreme Court Will Hear Birthright Citizenship Case

Also on Thursday, the U.S. Supreme Court said that it will hear oral arguments about the Trump administration's plans to end birthright citizenship. The court will hear the case on Thursday, May 15. The topic of birthright citizenship has been pushed to the forefront of the immigration crisis after Trump signed an executive order on his first day back in the Oval Office, effectively trying to ban the government from recognizing citizenship for those born in the U.S. to foreign parents.

The order has been challenged in the lower courts, where it has been ruled unconstitutional. The right of this type of citizenship has been in place since the landmark Supreme Court case of U.S. v. Wong Kim Ark, dating back to 1898.

IRS Planning to Rescind Tax-Exempt Status for Harvard, According to Reports

Reports that the Internal Revenue Service (IRS) has plans to rescind the tax-exempt status for Harvard University are starting to circulate throughout Washington, D.C. The Trump administration has not held back in criticizing the Ivy League school for refusing to eliminate its DEI practices.

The White House previously blocked more than $2 billion in federal funding for the oldest university in the country. Officials at Harvard are defending their decision to keep their DEI practices in place, saying that it is their constitutional right as a private university to decide its teaching policies. Education Secretary Linda McMahon has been signaling that the White House and the IRS will look at pulling the tax-exempt status for other colleges.

Former President Biden Speaks Publicly for First Time Since Leaving Washington, D.C.

Former President Joe Biden broke his silence at an event in Chicago on Tuesday evening. Biden spoke at the national conference of Advocates, Counselors, and Representatives for the Disabled (ACRD) in Chicago, marking his first public comments since leaving the Oval Office in January. The former president spent a good majority of the speech warning about the damage that Trump is causing to the future of the country's social security program.

Although Biden never mentioned Trump specifically, he was clear in his criticism of the current administration. The future of social security has been put in question as Elon Musk's Department of Government Efficiency (DOGE) continues to slash the jobs of thousands of federal employees.

Man Sets Fire to Home of Pennsylvania Gov. Josh Shapiro

A man set fire to the Pennsylvania governor's mansion early Sunday. Pennsylvania Gov. Josh Shapiro was home sleeping at the time, along with his four children, two dogs, and another family staying at the house. All of the occupants were safely evacuated.

Cody Balmer of Harrisburg was arrested in connection with what law enforcement said was an arson event after he forcibly entered the home. The 38-year-old suspect was charged with attempted murder, aggravated assault, aggravated arson, and terrorism. The home sustained significant damage as a result of the fire.

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