The stock market hasn’t cared about tariffs for months
To investors,
Today’s letter features a guest post from Phil Rosen, who writes the industry-leading financial markets newsletter Opening Bell Daily — subscribe free here.
Bearish market-watchers warned in April that tariffs would kill US exceptionalism and end America’s streak of outsized stock-market returns.
The opposite outlook has turned out much closer to the truth.
The S&P 500 has returned more than 33% since its April low following President Trump’s “Liberation Day” announcement and volatility — as measured by the VIX — has collapsed by nearly 70% in the same stretch to fall below its long-term average.
And while stocks have climbed and investors’ jitters have evaporated, the effective tariff rate remains at its highest levels in decades, as the chart below from Marta Norton, chief investment strategist at Empower, illustrates.
The stock market’s rebound is striking but unsurprising, according to history. Asset prices tend to rebound as quickly as they decline, reflecting a symmetry and reflexivity that’s held consistent across the last seven decades.
In fact, the current path for stocks since April 8 to present reflects an even sharper than usual bounce compared to the last 11 bear markets.
For investors the takeaway is clear. As much as politicians and legacy media want to complain and draw attention to tariffs, the new trade policy has not materially dented corporate earnings or market sentiment.
As it turns out, investors who sold their stocks due to tariff fears have under-performed their peers who held on through the noise by double-digits.
Indeed, AI enthusiasm and optimism surrounding Fed rate cuts have proven to be far more influential for asset prices. Now, those tailwinds are about to run into favorable seasonality.
Dating back to 1950, the final three months of a calendar year have produced average returns of 4.2% for the S&P 500, with positive returns 80% of the time.
Against that backdrop, tariffs barely seem to matter to anyone managing a portfolio.
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Jeff Park Explains The Dynamic Between Gold and Bitcoin
Jeff Park is a Partner and Chief Investing Officer of ProCap BTC.
In this conversation we talk about what is going on with bitcoin and gold, should we be worried about bitcoin lagging gold’s performance, durability of bitcoin vs gold, how to think about bitcoin as living software, and a new theme referencing the retardification of society.
Enjoy!
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Pomp, do you think Trump will deliver a stimulus checks from tariff revenue? And do you agree that people that were against the tariffs shouldn’t get one hahaha
The real economy is gone
Small businesses and jobs gone
Because of tariffs and immigration policies