US Stock Market Stages Surprise Rebound Amidst Trade Tensions

US Stock Market Rebounds Amidst Trade Tensions: A 90-Day Truce and Lower Inflation Offer Hope. The US stock market has surprisingly rebounded to its January 2025 levels, prompting analysis and speculation about the contributing factors. A key element is the recent 90-day pause in reciprocal tariffs between the US and China, easing investor concerns about a full-blown trade war. "News of a pause has likely helped drive some optimism back into the market," explains Don Sheil of ABC News. Adding to the positive sentiment is the latest US inflation data, revealing a lower-than-expected rise in prices. However, experts warn that the full impact of tariffs on inflation may not be reflected in data for several months. Justin Wolfers, an economist, notes that while things seem to be moving in the right direction, the situation remains volatile. "The half-life of a Trump trade policy seems to be about one Scaramucci, just a week or two," he observes, highlighting the inherent uncertainty. Analysts at Deutsche Bank express a belief that the worst of the trade war has passed, but caution that the US is not yet out of the woods. The situation underscores the complex interplay of global trade policies and their impact on market stability.