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Less Bite – May 27, 2025

Mike Tierney

Good morning,

On Friday morning – four long days ago – the White House announced a 50% tariff on the EU starting June 1. The market didn’t love it: the S&P 500 opened down -1% and closed off -.67%. Fast forward to this morning – after news that the start date has been pushed to July 9 – and Futures are up +1.5%. What gives?

It seems the market is starting to discount what feels like a case of “Big Bark, No Bite.” Deutsche Bank summed it up nicely over the weekend:

“After multiple threats by the US administration that have ultimately not been carried out, markets are no longer (neither do we) taking them at face value. After the 20% tariff announcement on ‘Liberation Day,’ the STOXX-50 was down almost 4%. After today’s 50% announcement, the STOXX-50 closed down less than 2%. It seems most likely that those tariffs are not here to stay.”

This doesn’t clear up the broader uncertainty coming out of the White House, but it may help reduce headline-driven volatility – a small win for calm.

The big event this week, aside from trade headlines, is Nvidia’s earnings tomorrow after the close. Expectations are for in-line, but NVDA has a way of surprising – and when it does, markets move.

Be well,
Mike

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