Markets shrug off Trump’s latest tariffs

Markets have taken U.S. President Donald Trump’s latest tariff salvos largely in their stride, with investors assessing whether the moves will have a lasting impact on trade or are another negotiating tactic.

The market has so far shrugged off the tariffs. Asia stocks were mostly higher, safe-haven assets stayed firm, with yield on the 10-year U.S. Treasury little changed, while gold inched about 1% higher. The U.S. dollar index slid around 0.3%.

“The market didn’t really react much to the news. It was already widely anticipated,” Ed Yardeni, president of Yardeni Research, told CNBC. “The market learned last year that the [global] economy is remarkably resilient in the face of what I call Trump tariff turmoil.”

Trump’s move to raise global tariffs to 15% from 10% initially announced, comes after the U.S. Supreme Court struck down a broad swath of levies he had imposed under the International Emergency Economic Powers Act. 

Market strategists said that the Supreme Court’s ruling looks more like a procedural reset than a reversal of protectionist policy. Section 122, under which the new tariffs have been imposed, effectively replaces the invalidated IEEPA tariffs on a temporary basis, while leaving in place duties under Section 301 and Section 232, including those targeting steel, autos and China.

So, not much has changed to unnerve the markets — at least, not yet.

Analysts suggest that the key for investors now is to be patient.

“No statement on trade policy from Trump is now treated as durable,” said Hugh Dive, chief investment officer at Atlas Funds Management.

“Sit on hands and do nothing, this is just noise, there will be something new to worry about within a few days,” he added.

Trump has developed a reputation among investors for using tariffs as a negotiating tactic, announcing sweeping or aggressive measures, then recalibrating once market stress or diplomatic pushback becomes clearer. The move has been widely referred as TACO: Trump Always Chickens Out.

“The President really wasn’t going to accept defeat without having a counter or strategy,” Yardeni said. However, he noted that the new approach is constrained: tariffs under Section 122 are temporary and harder to tailor country by country.

“It was much easier when he could use tariffs as a sledgehammer,” he told CNBC. “Now it’s become sort of a rubber mallet. It’s certainly not as powerful a tool.”

As for how investors should position, Yardeni echoed Altas’ Dive: “Sit still and do nothing. Focus on earnings, focus on the resilience of the economy.”

He also argued that last year’s tax legislation has “locked in some fairly stimulative fiscal policy,” which could help cushion any tariff drag. With midterm elections approaching, Yardeni suggested trade may recede as a political priority. “I won’t be surprised if the whole tariff approach gets buried between now and the midterm elections.”

Others are a bit more cautious.

“It would make sense to lighten up on risk unless you believe that you can see clearly through the confusion,” said Steve Sosnick, chief strategist at Interactive Brokers. He noted that investors can consider trimming U.S. equity exposure in favor of global companies less vulnerable to U.S. trade gyrations.

That said, to some extent, investors have already become accustomed to the “President’s capacity for “anger and desire for revenge,” though the escalation serves as an unpleasant reminder, he said.

From a cross-asset perspective, Sosnick said the impact could be limited as long as positive investor psychology allows them to look past the negative short-term impacts. That said, persistent uncertainty could weigh on global trade and corporate planning, making it “incredibly difficult to see how the prospect of future levies can be viewed as market friendly.”

Cryptocurrencies saw a sharper reaction Monday. Bitcoin’s slide of more than 5% reflects its status as what one expert called “a high-beta liquidity asset than a traditional safe haven.”

“A 5% move is well within its normal volatility range,” said Billy Leung, investment strategist at Global X Australia. Absent a regulatory shock, such pullbacks are typically flow-driven rather than fundamentals driven, he added.

Bitcoin has been on a steady decline since last October after it crossed $125,000, with the downturn extending into 2026. The world’s largest cryptocurrency is down 26% so far this year and has lost over 47% since the October high.

Leung’s base case is that markets treat the 15% tariffs as “more noise than a structural reset.”  

“There may be an initial volatility spike, but unless this evolves into a clearly durable and broad-based escalation, it is unlikely to materially derail global earnings or growth expectations.”