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New York, July 2025. Despite intensifying global trade tensions and political unpredictability, U.S. financial markets are experiencing a historic surge, with the S&P 500 breaking above 6,300 points for the first time ever, a powerful signal of investor confidence midway through President Donald Trump’s second term.
Since June 27, the S&P 500 has notched eight record highs, joined by surging gains in Bitcoin, strong bond rallies, and waning oil volatility, all pointing to an unusually calm yet bullish financial climate. This comes in the face of aggressive tariff policies, ongoing Middle East conflicts, and continued attacks on the Federal Reserve’s independence.
“This is a momentum-driven market defying gravity,” said Steve Sosnick, chief strategist at Interactive Brokers. “Investors are essentially betting that Trump’s tariff threats won’t last, or will be walked back before doing real damage.”
Analysts at Charles Schwab, Liz Ann Sonders and Kevin Gordon, describe the current run as a classic case of markets climbing a “wall of worry.”
“There’s no shortage of geopolitical concerns or economic unknowns,” they wrote in a client note. “But that’s often the fuel for bullish momentum, climbing despite the fear.”
Liz Ann Sonders and Kevin Gordon
Investor confidence was further buoyed by a powerful rebound from the market’s low point in early April, when Trump’s “Liberation Day” tariffs rattled Wall Street. According to strategists Jeff Buchbinder and Adam Turnquist at LPL Financial, the subsequent recovery was “one of the most powerful post-correction rebounds in market history.”
Despite record gains, not all is calm beneath the surface. The Trump administration’s August 1 deadline for new tariffs is casting a shadow. Thierry Wizman, a strategist at Macquarie Group, believes markets remain hopeful.
“Traders are banking on deals being struck or deadlines being softened. That’s keeping the sell-off instinct in check,” Wizman noted.
Trump, for his part, remains defiant. In an interview earlier this month, he told NBC News: “Tariffs have been very well received, the stock market hit a new high.”
Meanwhile, retail investors appear to be driving the rally. Equity strategist Venu Krishna at Barclays noted that individual buyers have pumped over $50 billion into global stocks in the past month alone.
As traditional markets surge, Bitcoin continues its meteoric rise, recently topping $123,000 amid Congressional moves to regulate digital assets. In contrast, the U.S. dollar has steadily declined, down nearly 11% since Trump took office, raising concerns among global economists.
Precious metals have become hedges against volatility: gold and silver have gained 30% and 35% respectively this year.
Some economists warn the calm might not last. Megan Horneman of Verdence Capital Advisors cautioned: “The market may be underestimating real risks, stocks are priced aggressively given the uncertainties.”
Ethan Harris, a former Bank of America economist, suggests Trump’s tariff tactics are less about follow-through and more about testing boundaries. “It’s a cycle of threats and retreats,” he said. “Markets may become the ultimate check on that strategy.”
With markets hovering near record highs and the August 1 tariff deadline approaching, the real test lies ahead: Can investor optimism outpace policy unpredictability?
“The next few weeks could redefine how much more risk markets are willing to absorb,” said Sosnick. “If tariffs hit hard, the resilience we see today may not last.”
Read also: Major Escalation: Trump Imposes 19% Tariff on Philippine Imports Amid Rising Trade Tensions.
