S&P 500 futures are up by 1.4%, with Nasdaq and Dow futures following suit at 1.1% and 1.7% respectively. There’s a buzz in the market about whether Trump might eventually strike some deals, yet the idea that he could just watch the chaos unfold is still a pressing concern. With only 24 hours left until the tariffs kick in, it appears Japan might be the only country ready to reach a temporary agreement for now.
For everyone else, Trump’s tariff threats could mean facing at least some short-term turmoil. In an optimistic scenario, this disruption could last just a few days or weeks before negotiations lead to resolutions. But the pessimistic outlook paints a picture where these issues linger, potentially shaking the global economy in the coming months.
Yesterday’s false reports about a 90-day tariff delay highlighted just how eager buyers are to dive in at any sign of relief. However, such optimism might be premature, making it unlikely that we’ll see a sudden shift in risk sentiment anytime soon.
As a result, investors looking to manage risk may need to search for signs of stabilization over time. Yet, that’s a tough call when the strategy involves closely watching for any progress in negotiations or deal-making.
In the interim, the longer these tariffs remain in effect, the more strain it imposes globally. Particularly if tensions between the US and China continue to rise.
Ultimately, while today’s market relief is a welcome sight, it doesn’t signal a major turning point. There’s still a myriad of hurdles to clear, making it clear that the road to resolution is far from over.
