Despite President Donald Trump’s recent imposition of high tariffs on dozens of countries, US stocks continue to hit record highs. The latest round of levies has prompted little more than a shrug from Wall Street, with investors seeming to view the announcements as diplomatic fodder rather than firm policy declarations.
According to experts, investors have grown weary of trade headlines and are experiencing “headline fatigue.” This has led to a shift in their perception of tariffs, with many now seeing them as a negotiating tactic rather than a hardline stance. As Bret Kenwell, US investment analyst at eToro, noted, once the administration opens the door to a negotiating period, markets realize that there is a point where the administration is willing to back down.
The latest round of tariffs has been met with limited market reaction, with stocks even recording gains on Monday despite the announcements. In contrast, previous tariff announcements have had a significant impact on markets, with major stock indexes plummeting in response. However, this time around, investors appear to be unfazed.
Experts warn that higher inflation and thinner margins could become consequences of Trump’s tariff policy, but so far, key measures of the economy have proven resilient despite fears of sky-high inflation and a possible economic downturn. For markets to demonstrate greater concern about tariffs, investors would need to see significantly higher inflation. As Kenwell noted, “Markets find a way to shrug off bad news.”
Source: https://abcnews.go.com/Business/markets-shrugging-off-trumps-tariffs-experts-explain/story?id=123766414