Why the S&P’s Trade-Driven Rally May Stall Before 6,000

After the post-“Liberation Day” plunge, the S&P 500 has recouped losses, buoyed by a larger-than-expected U.S.-China tariff rollback and a flurry of Trump's positive trade rhetoric. Yet, Sevens Report warns this relief rally may fizzle well short of new highs.

What Drove the Sharp Rebound

• Tariff Reduction Surprise: Instead of 145% vs. 125%, both sides agreed to cut levies to 30% and 10%, respectively—easing fears of an all-out trade war.

• Trump's “Happy Talk”: Public signals of talks with the U.K., South Korea, Japan, and India have bolstered risk appetite.

• Trump Put Repriced: Investors now believe policy backstops kick in around mid-5,000s in the S&P, rather than deep in the 4,000s.

Why This Rally Might Run Out of Steam

• Tariffs Still Elevated: Even after cuts, duty rates remain materially higher than in January—implying continued cost pressures.

• Policy Volatility: New threats against movies and pharmaceuticals underscore that trade risks are far from resolved.

• Lack of Fresh Catalysts: With no major de-escalation on the horizon, the boost from this round of tariff relief may be fleeting.

Tracking Key Upcoming Events

Markets will look to confirm whether the “Trump Put” holds at lower levels and whether fresh diplomatic breakthroughs can sustain gains. Stay ahead of critical trade meetings and economic data releases—such as U.S. tariff deadlines and consumer-price announcements—using the Economics Calendar API, which lists all major policy events in real time.

Bottom Line

This week's S&P bounce illustrates how relief from escalating trade tensions can drive sharp rallies. But without further policy clarity or a full rollback of tariffs, Sevens Report reminds us that today's gains may be “enjoyable morning rallies” rather than the start of a sustainable advance toward 6,000. Maintain discipline, watch for follow-through in trade talks, and be ready to adjust exposure if policy support ultimately proves fleeting.