Investors head into Trump tariff deadline benumbed and blase

Global investors are heading into U.S. President Donald Trump’s Wednesday deadline for trade tariffs palpably unexcited and prepared for a range of benign scenarios that they believe are already priced in.

Just days before the end of a 90-day pause he announced on his April 2 “Liberation Day” tariffs, Trump said the first batch of letters outlining the tariff levels they would face on exports to the United States would be sent to 12 countries on Monday.

Investors who have been tracking this date for months expect more details to emerge in the coming days and protracted uncertainty too, anticipating Trump will not be able to complete deals with all of America’s trading partners in the coming week.

And they are not overly concerned.

“The market has gotten much more comfortable, more sanguine, when it comes to tariff news,” said Jeff Blazek, co-chief investment officer of multi-asset at Neuberger Berman in New York.

“The markets think that there is enough ‘squishiness’ in the deadlines – absent any major surprise – to not be too unsettled by more tariff news and believe that the worst-case scenarios are off the table now.”

Both the tariff levels and effective dates have become moving targets. Trump said on Friday that tariffs ranging up to 70% could go into effect on August 1, levels far higher than the 10%-50% range he announced in April.

So far, the U.S. administration has a limited deal with Britain and an in-principle agreement with Vietnam.

Deals that had been anticipated with India and Japan have failed to materialize, and there have been setbacks in talks with the European Union.

World stocks are meanwhile at record highs, up 11% since April 2. They fell 14% in three trading sessions after that announcement but have since rallied 24%.

“If Liberation Day was the earthquake, the tariff letters will be the aftershocks. They won’t quite have the same impact on markets even if they are higher than the earlier 10%,” said Rong Ren Goh, a portfolio manager in the fixed income team at Eastspring Investments in Singapore.

“This financial system is so inundated with liquidity that it is hard to cash up or delever at the risk of lagging the markets, with April serving as a painful reminder for many who derisked and were then forced to chase the relentless recovery in the subsequent weeks.”

U.S. equity funds attracted strong inflows in the week to July 2, as U.S. stocks hit record highs on AI optimism, even as a 90-day pause on U.S. reciprocal tariffs is nearing its July 9 expiry with little progress in trade talks.

According to LSEG Lipper data, investors acquired a hefty $31.6 billion worth of U.S. equity funds in their largest weekly net purchase since November 13, 2024.

Optimism about artificial intelligence-linked stocks surged last week as Micron Technology, an AI-chip supplier to Nvidia and Advanced Micro Devices, forecast robust fourth-quarter sales.

The large-cap U.S. equity funds segment pulled in $31.04 billion in their best week since December 25, 2024. But mid-cap and small-cap funds had $1.72 billion and $1.09 billion worth of net sales.

Demand for sectoral funds was at the highest in five months as they attracted about $3.4 billion worth of net inflows during the week. The technology and financial sectors had a significant $1.17 billion and $1.04 billion worth of net purchases.

Investors also snapped up a net $6.66 billion worth of U.S. bond funds in an 11th successive week of net buying.

The short-to-intermediate investment-grade funds segments gained a net $4.14 billion weekly inflow, the largest figure since November 20, 2024.

General domestic taxable fixed income funds also received $3.03 billion, while short-to-intermediate government & treasury funds had a net $2.11 billion weekly outflow.

Weekly net investments in money market funds, meanwhile, were at $57.98 billion for the week, the highest in four weeks.