Capital Economics Sees Reasonable Caution

Analysts at Capital Economics, led by Jonas Goltermann, note that markets have adopted a “pretty relaxed view” of trade-related risks. Their client note explains:

• The White House has so far shied away from tariffs that could severely disrupt asset markets.

• A pause on most levies until early July gives negotiators extra time.

• Investors assume any extension would be granted if needed to seal deals.

“Optimism appears to rest in large part on continued positive headlines,” the strategists wrote, citing renewed impetus from recent Trump‑Xi discussions.

Tariff Timeline and Potential Jitters

• April: Trump unveils sweeping “reciprocal” tariffs across multiple countries.

• Late April: Markets tumble on fears of higher costs and supply‑chain stress.

• Early May: Administration delays most tariffs until July to facilitate negotiations.

• July: Deadline for either re‑implementation or further extension—risk of renewed jitters looms.

Market Performance: A Recovery in Progress

• S&P 500: Roughly 2% below its February record high.

• Nasdaq: About 3% below its December peak.

• May: Best monthly returns since November 2023, driven by upbeat earnings and subdued inflation.

This rebound suggests that investors are willing to look past the tariff threat—at least for now.

Tracking Sector Leaders

To identify the stocks and sectors benefiting from eased trade tensions, monitor Daily winners with the Market Biggest Gainers API. This endpoint shows which companies are outperforming as headlines shift.