The markets largely ignore the possibility A New tariff round Could tank stocks like in April.
President Donald Trump has published a further extension of his tariff policy, which is now to enter into force on August 1st. Several countries, including important trading partners such as South Korea and Japan Received “tariff letters” on Monday, which she informed about her new collective bargaining prices for her goods. The president also said that further letters will be sent on Tuesday and Wednesday.
Countries that would be letters issued from the countries would replace the new tariffs, which replace the Trump, originally announced on April 2.
Trump’s sudden wages at the beginning of this year tank markets. Now that the same option is absorbed, there are some markets at all -time highs. It looks like this ignore Everything together.
“At some point the rubber has to take to the streets, and there is a risks that mutual tariffs with the large trading partners could return to or around the level on April 2, and this could be a headwind for markets for markets,” said Nadia Lovell, UBS Global Wessh Management Senior Us -Attraße on Tuesday on Tuesday. “But for the time being, the markets are willing to look through this risk somehow.”
And look through it.
Last week the S&P 500 met one All -timeintraday high from 6,284.65. From Tuesday there are only about 50 points from this record. The markets did move back From a deep stand in early April, especially because the United States made a business policy in the way that was considered stable. They also got used to the Herky-Rucky nature of the White House tariff policy.
“In the past few months we have seen the administration just to de -escalate quickly, and this could also be another tactical escalation in any way,” said Lovell about the latest deadlines.
In investment circles, this phenomenon was described as that.Trump said”An indication of trading with options. It is an investment thesis in which Trump always reverses the course to guidelines that violate the stock market, so a DIP is temporary and a purchase option.
This does not mean that the markets were completely immune to the uncertainty. The Dow Jones and the S&P sank for the second time in a row on Tuesday.
So far, Trump has a certain predisposition to avert From his toughest tariff policy. The numerous Deadline extensions and breaks have contributed to claiming investors that the final versions of tariffs would not be as far as their first designs. There was also several carve-outs certainly Industries Like chips, critical minerals and some medicines. However, Trump promised that the deadline on August 1 would not give any extension.
Despite the current break, the total tariff rates for imports to the USA are more than six times higher than the beginning of the year. The average weighted tariff rate is 16% compared to 2.5% in 2024, depending on the UBS calculations. If all the postponed tariffs were re -implemented, this rate would increase to 21%.
In the entire Wall Street, financial institutions recommend that customers diversify US shares, although he has recovered since April. Many money managers move more from their portfolio to some European stocks that had been lagging behind their American colleagues for years. The US markets are still subject to the vicinals of a turbulent trade policy.
“Nothing that happened yesterday should mean that we are the US tariff history of 2025 at the end,” wrote Thierry Wizman, Macquarie Global foreign exchange and interest rates. “Apart from the fact that ‘mutual tariffs’ still have to be solved, there are also new” strategic tariffs “that you can look forward to this year.”
By increasing the tariff level, the growth forecasts of the United States would also be lower than already. In the earliest days of Trump’s tariff policy, the US recessions rose. Prognostics from Wall Street and the Federal Reserve have reduced their forecasts for GDP growth and increased those for inflation and unemployment. The median growth rate for the USA among the FED economists is now 1.4%. According to the US economist Jonathan Pingle, the projection of UBS 2025 is 0.9%lower.
If all April tariffs returned, the United States could lose “three more tenths” of its annual growth rate, said Pingle.
“This scenario will increase the probability of recession and it will feel like a rather slow growth,” he said. “I mean, the USA does not very often organize a growth of SUB 1%.”
