I do not know how to write an apolitical market update when the main issue driving markets is politics. We can only hope that Trump’s tariffs ultimately lead to reciprocal elimination of tariffs on both sides. Otherwise, we are playing chicken with our economy and the outcome might not be pretty.

The administration speaks of bringing manufacturing back to the U.S. Autoworkers and unions believe the vision. It will not happen. If auto manufacturing returns to the U.S., it will be automated. If you haven’t been inside a modern car manufacturing plant lately, here’s a link to a 4-year-old video of the Porsche Taycan plant to illustrate. https://youtu.be/XnWYgKWHUwc

Tariffs are the issue, and until the administration clarifies its plans and objectives, there will be uncertainty (and we know markets do not like uncertainty). Is this about fentanyl or jobs? Other countries’ tariffs are not fair to the U.S., and we need to push back, but the lack of clear policy and blanket tariffs are maddening.

Other than that, earnings and jobs are holding up and inflation is down. If Liberation Day goes down as planned at 4 PM today, that will change. But the good news is, Trump can reverse course as economic conditions deteriorate. Businesses cannot re-engineer supply chains overnight. Hopefully, today’s announcement will indicate lower tariff increases and a willingness to negotiate. The longer it goes, the deeper the permanent damage.

Longer term, the question is not if, but when things get better.