By Lewis Krauskopf
NEW YORK (Reuters) -After months of Wall Street gyrations to the twists and turns of U.S. trade policy, signs suggest stock investors are becoming more resilient to developments and cautiously defaulting to optimism that they have weathered the worst of the tariff-related shocks.
U.S. equities have edged higher over the past two weeks as they digest a sharp rally that has brought the benchmark S&P 500 within 3% of its February record high, fueled in part by easing fears about the economic fallout from tariffs.
A case in point: stocks ended Monday’s session higher even as markets had grappled with President Donald Trump’s announcement of doubling steel tariffs to 50%.
Trump’s stunning “Liberation Day” tariff announcement on April 2 sent stocks plunging and set off some of the most extreme market swings since the onset of the COVID-19 pandemic five years ago.
Since then, volatility measures have moderated considerably, and, with the market’s rebound, there are signs that technical damage from the slide has healed. Still, investors are mindful that markets remain susceptible to daily swings stemming from negotiations between the U.S. and trading partners as key deadlines near in coming weeks, with elevated valuations making stocks more vulnerable to disappointments.
“What has allowed this almost full recovery in the stock market hinges on the negotiations that are now under way,” said Angelo Kourkafas, senior investment strategist at Edward Jones.
“Markets, consumers and businesses have vested interest that we get clarity sooner than later,” Kourkafas said. “So potentially it’s going to be a critical summer that is going to test the market’s momentum.”
After falling to the brink of confirming a bear market on April 8, the S&P 500 has surged back nearly 20% and erased its losses for the year. Near the halfway mark of 2025, the index is now up 1.5%.
While Trump’s tariffs remain a risk, the market no longer is perceiving them as “this big outlier event,” said Keith Lerner, co-chief investment officer at Truist Advisory Services.
“We went through a period where the only thing that mattered for the markets was tariffs,” Lerner said. “And now we are in a period where tariffs still matter, but they are not the only thing that matters.”
Truist is among the firms becoming more upbeat on the outlook for equities, with RBC Capital Markets and Barclays this week lifting their year-end targets for the S&P 500.
Deutsche Bank strategists this week boosted their year-end target to 6,550, about 10% above current levels, as they cited a less severe expected tariffs hit to corporate profits.
DJ Kamal Mustafa
I’m DJ Kamal Mustafa, the founder and Editor-in-Chief of EMEA Tribune, a digital news platform that focuses on critical stories from Europe, the Middle East, Africa, and Pakistan. With a deep passion for investigative journalism, I’ve built a reputation for delivering exclusive, thought-provoking reports that highlight the region’s most pressing issues.
I’ve been a journalist for over 10 years, and I’m currently associated with EMEA Tribune, ARY News, Daily Times, Samaa TV, Minute Mirror, and many other media outlets. Throughout my career, I’ve remained committed to uncovering the truth and providing valuable insights that inform and engage the public.
