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So Much For Bad News Moratorium – May 23, 2025

Mike Tierney

Good morning,

So far this week, and somewhat predictably, the S&P 500 has pulled back modestly—call it a breather after the explosive six-week rebound that followed the “Tariff Tantrum” and its 20% plunge. The index is off about 2% for the week, and volatility has cooled back toward more normal levels. Not so in the bond market. With the House passing a massive $3.8 trillion tax and spending bill, long-term Treasury yields have surged (yields up = prices down). The 30-year Treasury touched 5.13%, and the market is clearly anxious about long-term fiscal sustainability.

Given that spike in yields, the S&P’s relatively minor dip is actually pretty impressive—especially for an index priced at 22x forward 12-month earnings.

And just as I’m typing this… boom—the White House drops news of a proposed 50% tariff on EU goods starting June 1. So much for the “90-day moratorium” on bad tariff headlines. As of 7:50 am EDT, futures are down about 1.5%, and yields have taken a back seat – for now.

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We can’t predict tariff decisions from an unpredictable president, or the global responses that may follow. Until more clarity emerges, economic policy and trade uncertainty will likely stay elevated—and markets will remain reactive, swinging up or down on the latest headline.

What is the broader message from markets right now? Neutral. No bullish or bearish trend evidence to speak of. Wherever we can be tax-efficient, we’ve neutralized portfolios to their benchmarks—no overweights, no underweights—just staying flexible until “uncertainty” is no longer the most overused word in the English lexicon.

As for the EU trade talks—they’ve stalled, and today’s announcement feels like part of a broader negotiation process. Translation: this too shall pass.

My advice? Turn off the screen and go enjoy the holiday weekend—as hard as that may be.

Be well,
Mike

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