The market is increasingly calling the bluff on tariffs, even before they’re announced.
Today’s ‘reciprocal’ tariff announcement initially left markets weary but after a CNBC report suggesting they will be delayed and have some exceptions, the market has quickly concluded that it’s more about negotiations than actual tariffs.
Yesterday, I highlighted how Congressional opposition to tariffs makes it unlikely they will be used to pay for tax cuts.
The S&P 500 is now 38 points higher or +0.6% with the Nasdaq even stronger up 1.0%.
SPX 10 mins
It’s a similar story in the FX market as the US dollar is at the lows of the day across the board. The euro is up 58 pips while the pound is up 93, both at session highs.
Another notable one is USD/CAD, which is now at the lowest since mid-December when Trump first threatened tariffs on Canada.