Stock markets are rewarding Trump’s new tariff threats with the S&P hovering near its record high

Trump connected Saturday threatened the European Union and Mexico with a 30% tariff. The higher levies would footwear successful Aug. 1, the aforesaid time that reciprocal tariffs with astir of the U.S.’s trading partners are acceptable to rise. On Monday, Trump threatened to slap Russia’s trading partners with 100% tariffs if President Vladimir Putin doesn’t extremity the warfare successful Ukraine wrong 50 days.

But the markets person learned to disregard specified threats, Deutsche Bank’s Jim Reid wrote successful a caller note, calling them “mostly a negotiating tactic.”

“If ‘tariff’ isn’t the connection of the twelvemonth for banal investors truthful far, past possibly it’s ‘uncertainty,'” LPL Financial wrote successful a probe enactment Monday. “Tariffs power the cardinal drivers of banal marketplace performance: economical and firm nett growth, inflation, and involvement rates. If stocks proceed to determination higher successful the 2nd fractional of the year, commercialized argumentation volition request to cooperate.”

While markets truthful acold person been sanguine, information releases this week could upend that. On Tuesday and Thursday, the Labor Department is acceptable to merchandise ostentation information for June. Analysts expect it to amusement user ostentation accelerated past period from 2.4% to 2.6%.

Earnings play besides kicks disconnected this week, with the large U.S. banks reporting their fiscal results for the erstwhile quarter. This comes aft galore ample companies yanked net guidance connected the pretext of tariffs, but the results volition connection a hint of the reply to the hottest question successful the economy: whether companies oregon consumers are paying the $100 cardinal successful tariffs collected truthful acold by the U.S. Treasury.

“Tariffs are not magically disappearing if they don’t amusement up successful user prices but determination on the proviso concatenation idiosyncratic is getting clipped,” Peter Boockvar, main concern serviceman astatine Bleakley Financial Group, said successful a note.

This communicative was primitively featured connected Fortune.com