- President Trump’s latest tariff salvo—threatening 10%-70% levies on non-deal countries and an extra 10% for BRICs—would once have rattled markets. Instead, the S&P 500 now sits at a record high (6,279.35), with volatility muted and the VIX “fear” index dormant. Analysts say investors now treat policy chaos as background noise; uncertainty is simply the new certainty.
President Trump said last night he will begin sending letters to the various countries that did not sign trade deals with the U.S. since April, imposing tariffs upon them of 10%-70%. He also said he would punish any country aligned with the BRICs group (that’s Brazil, Russia, India, and China) with an extra 10% tariff. The new deadline for these tariffs to take effect will be August 1.
All of this would normally create a great deal of uncertainty in the markets, leading to dramatic selloffs and high volatility. Indeed, we saw that happen in April when Trump first proposed his new tariff levels. Markets plunged. Yet today, the markets will open in New York with the S&P sitting at a new record high. The VIX “fear” index is asleep.
Why are investors so unbothered by Trump’s tariff chaos?
As Fortune noted recently, everyone expected Trump’s policies to damage the U.S. and global economies, but that damage has yet to appear.
Some analysts are starting to conclude that investors have become inured to them, and regard all this uncertainty as the new normal.
Uncertainty is the new certainty, in other words. An example of that? The Bloomberg Trade Policy Uncertainty Index has declined in recent days despite Trump’s theatrics.
Goldman Sachs published an interesting note recently titled, “A Surprisingly Small Uncertainty Drag,” by Joseph Briggs and Sarah Dong. They argue that while the tariffs are a big deal in the U.S., whose consumers will be paying them, the exposure of the economies of the countries that trade with the U.S. is relatively small. Too small to derail global growth, they say.
“Trade policy uncertainty rose after President Trump’s election but has recently pulled back according to standard indices. Our own and the Fed’s statistical estimates (as well as economic theory) imply that the drag on growth from uncertainty peaks shortly after it first increases, implying that uncertainty should have already slowed global growth. There are very few signs that uncertainty is taking a toll on activity, however, as investment, manufacturing employment, spending, and overall activity have all held up globally in 2025H1,” the note said.
At UBS, Paul Donovan noted that today’s trade letters will actually push back further any negative impact they create: “Allowing for some stockpiling ahead of Christmas, consumers may not experience the inflation spike from these taxes until January next year—assuming that Trump does not retreat again,” he told clients this morning.
Here’s a snapshot of the action before the opening bell in New York:
- S&P 500 futures were off 0.43% this morning, before the open.
- The S&P 500 index closed up 0.83% on Friday, hitting a new all-time high at 6,279.35.
- Bitcoin was above $109K.
- Japan’s Nikkei 225 fell 0.56% this morning.
- China’s CSI 300 fell 0.43%.
- Stoxx Europe 600 was flat in early trading.