Investors Eye Tariff Deadline as Markets Brace for Impact

The expiration of a temporary suspension on import tariffs is causing market jitters, as U.S. trading partners negotiate with President Trump's administration to avoid increased levies. While new deals and temporary reprieves are in play, uncertainties continue to affect investor behavior, despite the S&P 500's significant gains.

Investors are closely monitoring tariff developments coming out of Washington with the looming expiration of a temporary suspension on import levies. Should the deadline pass without escalating trade tensions, it could have a positive impact on the markets.

President Trump's administration is under pressure as negotiators from over a dozen trading partners scramble to reach agreements before potential tariff hikes. A recent agreement with Vietnam reduced promised tariffs to 20%, sparking a rally, but expectations are mixed with ongoing negotiations including those with India and Japan.

Despite the S&P 500 reaching new highs, driven largely by retail investors and corporate buybacks, institutional investors remain cautious, with equity positioning still below previous levels. Analysts suggest passing the tariff deadline without increased tensions may alleviate some market concerns, even as economic growth worries persist.

(With inputs from agencies.)