Deregulation Begins To Dominate

Key.

The markets seemed a little nonplussed when it came to tariff developments earlier in the week, but the 35% Canada tariff seemed to give it a little jolt. Overall, the rhetoric surrounding the trade war seemed to intensify again, but I think the longer-term implications are in question. Trump has frequently threatened tariffs only to back down soon after. His announcement that he was delaying the implementation of tariffs until August 1st is a good example. At this point, we’re running out of excuses as to why the market might think this is a positive. The start/stop nature of tariffs has consistently created a lot of confusion and this time is unlikely to be different. We’ve had 200 trade deals promised, but so far have gotten fewer than a half dozen. I think we probably see this week’s developments eventually fade like threats of the past.

Trump’s Big Beautiful Bill has officially passed, which means tax cuts for some households but tax incentives for a lot of corporations. Following the passage of the TCJA in Trump’s first term, the stock market rallied for months as corporate earnings got a big boost. Are we in for a repeat this time around? Probably not, but there’s a possibility that we could see earnings increase again. The impact on the national debt will be significant, but the benefits for corporations could lift stock prices in the near-term, especially if the Fed starts cutting rates.