The market remains calm, and analysts have even raised their stock market target prices, as Wall Street completely ignores the threat of tariffs!

In the face of Trump's latest tariff threats, Wall Street has shown remarkable calm, with analysts even taking the opportunity to raise their stock market target prices. According to CCTV News, Trump threatened on Tuesday to impose a 50% tariff on copper and up to a 200% tariff on pharmaceuticals. The copper tariffs are set to take effect later in July or on August 1, while the transition period for pharmaceutical tariffs may last at least a year, allowing companies to shift their supply chains back to the U.S. before the tariffs take effect. The stock market reacted almost indifferently to the new tariffs, with the S&P 500 index only falling by 0.07%. This round of tariff threats should have triggered market turbulence. According to media statistics, if these tariffs are implemented as scheduled, the average tariff rate on U.S. imports will reach its highest level in a century, returning to the levels seen during the Great Depression under the Smoot-Hawley Act. If other countries also face similar tariffs, the overall rate will reach its highest level since the presidency of William McKinley from 1897 to 1901. However, investors remain unfazed. Meanwhile, well-known analysts on Wall Street are raising their stock market expectations, with Bank of America's Savita Subramanian raising her year-end target price from 5,600 points to 6,300 points, and Goldman Sachs' David Kostin significantly raising his target price from 6,100 points to 6,600 points. This contrast highlights the market's fundamental skepticism towards tariff policies. Investors generally believe that these threats are more of a negotiation strategy rather than genuine policy intentions, choosing to ignore the potential risks of a trade war. Stock Market Unfazed, Analysts Bullish Against the Trend On the day Trump announced the new round of tariff threats, the U.S. stock market experienced one of its calmest trading days of the year. The S&P 500 index closed down only 0.07%, almost returning to the levels before the July 4 Independence Day holiday. This calm response stands in stark contrast to the severity of the tariff threats. Even though Trump claimed there would be no further extensions after the new deadline of August 1, the market remained calm. A trader survey by Barclays stock strategist Alexander Altmann shows that nearly everyone believes the effective tariff rate will stabilize above 10%. Meanwhile, Wall Street analysts have raised their expectations amid this seemingly unfavorable trade news. Goldman Sachs' David Kostin attributed his reasoning to an expected increase in the price-to-earnings ratio by 8%, from 20.4 times to 22 times next year's expected earnings. He stated: The earlier and deeper-than-previously-expected Federal Reserve easing policy and lower bond yields, the continued strong fundamentals of large-cap stocks, and investors' willingness to overlook potential recent earnings weakness all support our upward revision of the S&P 500 forward price-to-earnings ratio forecast Tariff Threats Become Empty Promises, Market Forms "TACO" Consensus The market's indifference to tariff threats reflects a deep skepticism among investors regarding Trump's trade policies. This phenomenon has been humorously dubbed "TACO" (Trump Always Chickens Out). Peter Tchir of Academy Securities stated: Perhaps these tariff headlines are all fake news, but at historical highs, that's quite a big assumption. This market judgment is not without basis. Trump previously paused tariff plans due to the "intense" reaction from the bond market, where the rapid rise in bond yields threatened the U.S. government's ability to finance its deficit, forcing a reconsideration. This reinforces the concept of "Trump Put Options"—the idea that the president will back down from unpopular policies when the market reaches a certain level. The latest consumer inflation expectations survey released by the New York Federal Reserve on Tuesday shows expectations have fallen to 3%, exactly at the upper limit of the Federal Reserve's target range. This indicates that consumers' concerns about tariffs pushing up inflation are dissipating. Commodity Markets Experience Wild Fluctuations, Impact on Real Economy Becomes Apparent While the stock market remains calm, the tariff threats have had a significant impact on specific commodity markets. Copper futures surged more than 10% after Trump's speech, marking the first such increase since the global financial crisis in October 2008, with copper prices reaching historical highs. The S&P 500 pharmaceutical sector also experienced significant volatility. The performance of industries directly affected by tariff threats demonstrates that even if tariffs are ultimately not implemented, the threat itself has already had a profound impact on prices. Dan Wales, head of economic research at Fulcrum Asset Management in London, pointed out that the erratic trade policy regime could create a chilling effect. He stated: A "flexible" tariff system helps no one. People need to be able to plan for commodity prices. Sir Ivan Rogers, former UK trade representative and current head of Fordham Global Foresight, noted: U.S. trade policy is entirely dependent on the president himself, who is surrounded by different factions with varying objectives. Who has spoken to him recently could be decisive. Risk Warning and Disclaimer Markets are risky, and investments should be made cautiously. This article does not constitute personal investment advice and does not take into account the specific investment objectives, financial situation, or needs of individual users. Users should consider whether any opinions, views, or conclusions in this article are suitable for their specific circumstances. Investing based on this is at one's own risk