CNBC Daily Open: Wishing upon a meteor that tariffs won’t cause inflation

U.S. President Donald Trump announced Tuesday that copper and pharmaceutical imports will face tariffs of 50% and as high as 200%, respectively.

Following the news, the S&P 500, which hit multiple record closes last week, ground to a halt and closed mostly flat.

That said, it’s a muted response for such hefty tariffs, suggesting investors are either brushing off Trump’s tariffs as hollow threats, or discounting the effects they could have on inflation and the economy.  

Such complacency could be a mistake, as some market watchers have cautioned. It also mirrors the White House’s stance on the effects of tariffs, which might not be a position investors want to take.

On Tuesday, Stephen Miran, chairman of Trump’s Council of Economic Advisers, told CNBC’s “Squawk Box” that the odds of tariffs leading to higher prices is a “rare event” like “pandemics or, or meteors or whatever.”

“I don’t mean to be dismissive,” Miran clarified. “All I mean to say is that prediction is difficult, and we should always speak in terms of odds and possibilities.”

For the record, there’s a 0.004% chance of an asteroid that will fly near Earth in 2023 striking our planet, according to NBC News.

New tariffs on copper and pharmaceuticals. Copper imports will attract a 50% duty while that of pharmaceuticals will be subject to tariffs as high as 200%, Trump said Tuesday. He didn’t specify when they would take effect, but said the latter might kick in within a year and half.

China’s producer prices plunged in June. The wholesale price index fell 3.6% from a year earlier, its largest decline in nearly two years. But consumer prices in June staged an early recovery, inching up 0.1% from the same period last year.

South Korea and Japan’s economies could shrink further. First-quarter gross domestic product of both countries contracted from the previous three months — and could experience steeper falls in the months ahead because ofTrump’s newly unleashed tariffs.

U.S. stocks were mostly unchanged. On Tuesday, the S&P 500 and Nasdaq Composite closed around the flatline, while the Dow Jones Industrial Average slipped 0.37%.Asia-Pacific markets traded mixed Wednesday.

[PRO] Retail investors outperformed fund managers. Robinhood’s CEO told CNBC that the institutional players which spent weeks after Trump’s “liberation day” seeking safe havens lost out to retail investors who stuck with a simple strategy.