Tariff mayhem continues: In a recent court ruling, the Trump-era tariffs were deemed unlawful, a decision that brought a wave of relief and, just as quickly, a fresh dose of uncertainty. While the courts may have offered a temporary reprieve, there’s little indication that the trade hawks are done. The suspension of the tariffs has once again been put on hold as the Trump administration seeks to appeal the ruling. The likely next step should the administration lose on appeal? Finding a new legal route to reimpose similar tariffs under different statutes.
Unpredictable trade policy remains a drag on markets. In our opinion, these tariffs are economic malpractice. They raise prices on American consumers, burden businesses, and damage international relationships, all without solving the underlying issues they claim to address. Investors should keep in mind that this type of policy instability can ripple through global supply chains and weigh on business confidence.
Corporation earnings: Despite all the noise, Q1 earnings were surprisingly solid. Many companies have posted better-than-expected profits, helping the stock market recover from its February-April slump. This rebound has been encouraging, but there’s a catch. Even companies beating expectations are issuing cautious outlooks. Why? Persistent inflation pressures, shaky consumer sentiment, and concerns around tariffs and policy risk. Add to that already-stretched valuations, and it’s becoming clear that future market gains may depend more than ever on companies delivering real earnings growth.
The “Big Beautiful Bill”: The House narrowly passed a sweeping GOP tax bill that its supporters call “big and beautiful”. While it offers some appealing cuts, the bill fails the test of responsible reform. It adds significantly to the national deficit and, given its razor-thin passage, is unlikely to make it across the finish line when it hits the Senate. If it does, it may look very different by the time it gets there.
Looking ahead: Markets are in a tug-of-war between solid corporate fundamentals and erratic policy developments. Companies are showing resilience, but policy uncertainty – especially on trade and taxes – is making it harder to chart a clear course. If you’re wondering how these developments could affect your personal financial strategy, we’re always happy to provide additional guidance.