Why This Market Shrugs Off Tariff Drama  | | Robert Ross
Speculative Assets Specialist | Is it 2018 again? I seem to be having some déjà vu... Back then, markets faced similar tensions, driven by tariff threats. Interestingly, it was small-cap stocks that took center stage. And as President Trump starts his second term, using tariffs in somewhat unorthodox ways, we can look to the past for clues about the future. Because while history doesn't repeat, it often rhymes. | SPONSORED | | Alexander Green Reveals The Top Trump Trades for 2025 Wharton's Jeremy Siegel says Trump is "the most pro-stock market president we've had in our history." And the numbers back it up. During Trump's first term, innovative companies soared: - TradeDesk jumped 2,500%
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Now, with Trump's new economic blueprint in place, investment expert Alexander Green has identified a handful companies set to lead the next wave of wealth creation... And Alex is revealing their names and ticker symbols, free of charge. → CLICK HERE TO WATCH NOW | | | The Data Is Clear on This There was a lot of pearl clutching last week. It seemed like tariffs would blow up the global economy. I found it rather funny. Did you know the U.S. barely tariffs its trading partners? Yes, according to a 2022 report, U.S. tariff rates are much lower than those imposed by other countries on U.S. exports. For example, India, Argentina, and Korea, along with other nations, have average tariffs above 10%, while the U.S. rate hovers closer to 3% - a sharp contrast. 
View larger image Now, I get why the market reacts negatively to tariff news. Tariffs are essentially a tax on trade, which disrupts the flow of goods and increases costs for businesses. Industries reliant on imports or global supply chains get hit particularly hard. For small-cap stocks, which are usually focused on domestic markets, tariffs create uncertainties that ripple through the economy. You see, small companies often struggle with tariffs more than larger firms when tariffs. They simply don't have the same scale or resources to absorb higher costs. Big players, on the other hand, can use their size to negotiate better terms or shift production to lower-cost countries. Smaller companies may not have these options. As a result, they are more likely to see increased costs for raw materials and finished goods, which can erode margins and hinder growth. The real danger is when tariffs trigger other countries to retaliate, escalating into trade wars. This uncertainty makes it harder for businesses to plan and forecast future earnings. With small-cap stocks, this unpredictability can weigh on investor sentiment, leading to price volatility. While that's what we saw in 2018, I see this time as an opportunity. Much Ado About Nothing When President Trump first announced his tariffs on February 5, 2018, the market reaction was pure chaos. The Dow plunged 4.6%. Over the next few months, stocks continued to struggle as the major indexes headed into near-bear market territory. 
View larger image But this time WAS different. Trump announced even larger tariffs on key trading partners Canada, Mexico, and China. While the S&P 500 fell 1%, the losses were quickly parred as the tariffs were lifted before markets closed for the day. This tells us something about how markets will react to future tariffs. In 2018, investors weren't sure how far Trump would take his trade wars. Now, investors sort of know what to expect. So, not only were the losses less despite larger tariffs, but markets flipped like a pancake once Mexico was given a 30-day reprieve. This tells me that tariff-related sell-offs going forward should be bought. It also says the bull market is stronger than people give it credit for. Just Keep Buying We saw a similar dynamic with the DeepSeek sell-off two weeks ago. While there was initial panic in the markets, it quickly eased as all losses were gobbled up by the bulls. Despite the short-term volatility that often accompanies tariff announcements, the underlying trend remains intact. Much like the 2013 Taper Tantrum, the markets can overreact to these tariff-driven sell-offs. Back then, we saw a similar response to monetary policy. A possible Fed rate tightening sent investors into a panic. Markets dropped sharply, only to recover quickly as the reality of the situation set in: the Fed wasn't going to disrupt the economic recovery as much as initially feared. The Taper Tantrum ultimately turned into a buying opportunity, and the market rallied higher. Today, we're seeing a similar pattern with tariffs. The market may overreact at first. But investors have learned that these disruptions are often short-lived. With tariffs, the initial fear gives way to understanding and adjustment, allowing investors to seize opportunities as they arise. Just as the Taper Tantrum was eventually revealed to be an overreaction, the current tariff turbulence is likely to be seen in the same light. The big picture is clear... Markets are stronger than many believe, and volatility should be viewed as an opportunity, not a risk. Tariffs may create short-term turbulence, but the long-term trend remains intact. Focus on the bigger picture and use sell-offs as opportunities to position yourself for long-term success. Stay safe out there, Robert Want more content like this? | | | | | | 
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