The market is ignoring the latest round of Trump’s tariffs, but “at some point, rubber has to hit the road,” says UBS strategist.
The market is largely ignoring the possibilities New round of customs You may be tanking stock as you did in April.
President Donald Trump has issued another extension of his tariff policy, which is currently scheduled to come into effect on August 1st. Korea and Japan I received a “custom letter” on Monday and notified me of new customs fees on the goods. The president also said more letters will be sent on Tuesday and Wednesday.
The country that was issued will see new tariffs in place of the new tariffs that replace Trump, which was first announced on April 2.
Earlier this year, Trump’s sudden tariff announcement fought the market. Some markets are always at the best as the same possibilities are looming right now. Markets are not just the price of risk, but perhaps Ignore it It’s all the same.
“At some point, rubber will have to hit the road, and mutual tariffs with key trading partners could return to or around April 2 levels, which was said by Nadia Label, senior US equity strategist UBS Global Wealth Management during a media brief on Tuesday. “But for now, the market is pleased to see through this risk.”
And see what they have.
Last week, the S&P 500 was a hit. The highest ever 6,284.65. As of Tuesday, it was just 50 points from that record. The market did that Backback It is mainly because the US is considered a stable by trade policy investors, so it is low in early April. They have also become more familiar with the Harkey Jerky nature of the White House tariff policy.
“We’ve seen the administration escalate over the past few months, but it’s only escalating right away, and this could somehow be another tactical escalation,” Lovell said of the latest deadline.
In the investment world, this phenomenon is called “.Trump leftreference to options trading. This is an investment paper that argues that Trump will always reverse courses on policies that hurt the stock market. Therefore, DIP is a temporary purchase opportunity.
That doesn’t mean that the market is completely immune to what uncertainty tariffs bring. Dow Jones and S&P sank on Tuesday for the second day in a row.
So far, Trump has shown several predispositions Please turn your back From his strictest customs policy. Many Deadlines and suspensions help investor assue lawsuits, with the final version of the tariff not being swept as much as the first draft. There was again Some sculptures surely industry Chips, important minerals, some medicines, etc. However, Trump vowed that the August 1 deadline would not be expanded.
Despite the current suspension, the overall tariff rate for imports into the US is more than six times higher than at the beginning of the year. According to UBS calculations, the average weighted tariff rate is 16% versus 2.5% in 2024. If all deferred tariffs are reimplemented, the rate will rise to 21%.
All over Wall Street, financial institutions are recommending clients diversify away from US stocks despite being rebounded since April. Many money managers are transferring more portfolios to European stocks. The US market, the reason behind these investors, remains subject to turbulent trade policy fluctuations.
“What happened yesterday doesn’t mean it’s near the end of the 2025 US tariff story,” writes Thierry Withman, Macquarie’s global forex and rate strategist. “There are also new “strategic tariffs” that we look forward to this year, except that “mutual tariffs” still need to be resolved. ”
Increased tariff levels will result in US growth forecasts lower than they already have. In the early days of Trump’s tariff policy, the odds of the US recession skyrocketed. Wall Street and the Federal Reserve Forecasts have reduced forecasts for GDP growth and raised them for inflation and unemployment. The median US growth rate among Fed economists is currently 1.4%. UBS’s 2025 forecast is low, falling in 0.9%, according to US economist Prime Minister Jonathan Pingle.
With all the tariffs back in April, the US could lose “an additional three-thirds” of annual growth, Pingle said.
“Under that scenario, the odds of a recession will rise and it will feel like a rather slow growth,” he said. “So the US doesn’t run 1% growth very often.”