President Donald Trump has threatened to revive his trade war, but investors remain unconcerned. After ratcheting up tariffs on Monday and extending the deadline to August 1, Trump said he was open to negotiations, providing a sense of optimism for investors.
Stocks across Asia were higher on Tuesday, while US stocks were mixed. The Dow fell 166 points, or 0.37%, but the Nasdaq gained just 0.03%. Market movements were relatively muted, signaling investors think Trump’s new tariffs are more negotiating tactics than firm policy.
Analysts say markets have “broadly shrugged off” the tariff news, with some viewing it as a mere speed bump rather than a major disruption. Tony Sycamore, market analyst at IG Australia, said, “This latest round of tariff news feels more like an aftershock, one the market was prepared for, rather than the seismic event that shook markets on ‘Liberation Day’ over three months ago.”
Trump’s new tariff announcements are a departure from his earlier approach, which sent stocks plummeting. Investors are now focusing on other factors, such as inflation data and trade deals, which may provide more insight into the economic impact of tariffs.
Bank of America raised its year-end forecast for the S&P 500 to 6,300, citing expectations of Federal Reserve rate cuts and “fundamental strength” of large US stocks. Goldman Sachs also raised its forecast, citing investor willingness to look through likely near-term earnings weakness.
Analysts caution that investors should not become complacent, as Trump’s tariff agenda remains unpredictable. Some warn that the market may be overestimating the ability to negotiate down tariffs or is simply “TACO trading” – betting on Trump’s reluctance to push for higher tariff rates.
Source: https://edition.cnn.com/2025/07/08/economy/us-stock-market