Stocks continue to rise despite stagnant tariff deals and inflated valuations. Analysts warn of market complacency towards trade policies. Strong Q2 earnings and AI trends may fuel further stock gains. Despite escalating tariff threats, investors remain unfazed, attributing market resilience to “headline fatigue.” Stocks have rebounded significantly since April lows, up 27%. Tariffs could hinder economic growth and corporate profits, yet market optimism persists. New tariff threats have failed to impact the market, largely due to widespread optimism and reduced rates. Morningstar US Market Index up 7.7% YTD, despite looming tariff uncertainties. The market remains resilient, but analysts warn of hidden vulnerabilities. US inks trade deals with UK, Vietnam, and Indonesia, threatens higher tariffs on Brazil, Canada, and others. Trump’s rhetoric on tariffs has shifted to a more hawkish stance, surprising investors. Average US tariff rates expected to rise significantly, potentially impacting economic growth. Market anticipates further tariff deals, but risks loom as deadlines approach. Market climbs steadily, but experts caution against complacency. Stretched valuations pose risks amid tariff uncertainties, warns Morningstar strategist. Market trading at 2% premium to fair value, lacking downside cushion. Tariff-induced inflation and demand destruction could spark recession fears. Earnings season and tax bill could drive stock gains despite tariff concerns. Second-quarter earnings outlook key focus amid tariff cost concerns. Business-friendly tax bill may support earnings growth despite tariff impacts. AI trends, like Nvidia’s chip sales in China, offer long-term market support. Investors look beyond tariff headlines, focusing on earnings and tax bill benefits.

Read more at Morningstar: Do Tariffs Still Matter for Stocks?