The S&P 500 closed up 0.55% yesterday on good news about U.S. GDP growth and President Trump retracting his threat to impose more tariffs on Europe if he isn’t given Greenland. After a selloff earlier this week, the S&P is again above 6,900 and within 1% of its all-time high. Gold hit another record yesterday, too.
But futures on the index were down 0.24% prior to the opening bell in New York, and markets in Europe sold off slightly this morning after Asia closed mixed, a sign that traders are booking profits after yesterday’s rally.
On the macro front, Wall Street analysts are bullish. It’s a marked change from the fraught mood of the past few days.
In fact, Trump’s tariffs are turning out to be a much smaller economic deal than “earlier worst-case fears,” JPMorgan Chase says. Companies have adjusted their pricing and supply chains, and the result is “the realized tariff rate has been much lower at ~11% (versus expectations of 15%)”, according to Dubravko Lakos-Bujas and his team. “Only 14% of S&P 500 companies are highly sensitive to tariffs.”
