Wall Street Stays Wary as Trade Hopes Collide with Economic Uncertainty
Despite President Trump’s renewed calls for investors to dive into the stock market, financial strategists remain cautious as lingering trade tensions and shifting economic signals muddy the outlook.
Markets showed brief enthusiasm last week following the announcement of a UK-US trade agreement, with Trump teasing future deals and hinting at tax reforms in the pipeline. His bullish rhetoric included urging Americans to “buy stock now” while suggesting the economy was poised for explosive growth. But seasoned investors aren’t buying the hype just yet.
Economic advisors warn that the bigger picture remains clouded by unresolved trade negotiations, especially with China. Treasury Secretary Scott Bessent is expected to meet with Chinese counterparts this weekend, with the White House reportedly considering cutting tariffs on Chinese imports from 145% to 80%. However, the clock is ticking — a temporary freeze on tariffs ends July 9, and delays could have real consequences.
“This is all about timing,” said MJP’s Brian Vendig, who sees short-term market stability as unlikely. He emphasized that any slowdown in trade progress could disrupt inventories and shake consumer demand.
There are already signs of strain. Ports in Los Angeles are seeing sharply lower cargo traffic, with incoming shipments down more than a third compared to last year. Meanwhile, Chinese exports to the U.S. have plunged, as the country leans on alternative trade routes.
Former Fed official William Dudley noted that even if new agreements are reached, existing supply chain fractures may take months to mend. “The damage is already underway,” he said.
Beneath the surface, economic sentiment is deteriorating. While employment figures remain stable, consumer confidence is slipping to post-pandemic lows. Surveys suggest Americans are more concerned than ever about job security, and several companies have retracted earnings guidance, citing trade instability.
Roger Aliaga-Díaz, chief economist at Vanguard, expects inflation to be the first sign of deeper trouble. “We’ll see pricing pressure before it shows up in spending,” he warned, anticipating weaker consumer activity later this year.
Not everyone sees doom ahead, but even optimists are proceeding with caution. Some believe Trump’s new tariff approach may be less harsh than expected, which could help limit equity downside. Still, experts like Ross Mayfield of Baird aren’t ruling out a retest of recent market lows — especially if policy takes another aggressive turn.
In this climate, conservative strategies are gaining favor. Sectors like utilities and communications are drawing attention from investors looking to weather potential turbulence. “When outcomes are this uncertain, chasing peak valuations makes little sense,” said Keith Lerner of Truist.
Alexander Stefanov
Reporter at Coindoo
Alex is an experienced finance journalist and a cryptocurrency and blockchain enthusiast. With over 8 years of experience covering the crypto, blockchain and fintech industries, he deeply understands the complex and constantly evolving world of digital assets. His insightful and thought-provoking articles provide readers with a clear picture of the latest developments and trends in the market. His passionate approach allows him to break down complex ideas into accessible and insightful content. Follow up on his content to be up to date with the most important trends and topics.
