Investors are reassessing tariffs as stock markets finish lower. A sense of normalcy returned early on Tuesday, pushing S&P 500 and Nasdaq Composite indexes towards their best performances in over two years before fading optimism sent them falling.
Initially, market participants seemed to have moved past the worst possible outcomes regarding US-imposed tariffs. Japan is set for priority treatment in trade talks with the US, while Vietnam has offered 0% tariffs on US goods. Over 50 countries have reached out to negotiate, according to Treasury Secretary Scott Bessent.
However, investors continue to face uncertainty after the White House confirmed US tariffs on all imports from China will rise to 104%. The earlier gains were described as a “dead-cat bounce” – a brief recovery from falling asset prices.
Experts warn that tariffs are not going away. Peter Azzinaro, a partner and senior portfolio manager at Agile Investment Management, said, “Tariffs are not going away.” DoubleLine CEO Jeffrey Gundlach also noted that leveraged investors have been forced into liquidations since last week.
The Dow Jones Industrial Average, Treasury yields, gold, oil, and bonds all experienced significant selling pressure on Tuesday. Investors sold assets despite their reputation as safe havens. Crude oil fell for a third session to its lowest settlement since April 13, 2021.
Adam Turnquist, chief technical strategist at LPL Financial, described the market moves as “indiscriminate” with people selling what they have to instead of what they wanted to. Global X’s Scott Helfstein warned that unprecedented uncertainty will persist but recommended finding high-quality assets at reasonable valuations and hedging exposures in sideways markets.
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Source: https://www.marketwatch.com/story/why-investors-are-putting-tariff-and-recession-fears-aside-as-stocks-rebound-aef6059b