As global investors approach the deadline set by U.S. President Donald Trump for trade tariffs, market sentiment remains notably calm. According to a report by Reuters, investors are prepared for a variety of scenarios, believing that the worst-case outcomes have been largely discounted.

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With the impending end of a 90-day pause on tariffs, Trump has announced that letters detailing new tariff levels will be sent to 12 countries. Despite this, investors are not overly concerned, as they anticipate that any shocks will be less impactful than the initial tariff announcements. The U.S. administration has secured limited agreements with Britain and Vietnam, but deals with India, Japan, and the European Union remain elusive.

Meanwhile, world stock markets have reached record highs, with an 11% increase since April 2, after initially dropping 14% post-announcement. This recovery, as noted by IndexBox data, reflects a robust market resilience, buoyed by liquidity and recent legislative developments, including Trump’s tax and spending package.

Despite these gains, bond investors are cautious about the potential inflationary impact of tariffs and the implications for Federal Reserve policy. The dollar has experienced a significant decline, with the dollar index marking its worst first half of the year since 1973, dropping by 11% overall. Market analysts are closely monitoring interest rate trends, which could shift depending on bond market reactions to fiscal policies.

Source: IndexBox Market Intelligence Platform