"What they're saying: "The market has gotten comfortable, maybe naively," Trevor Slaven, global head of asset allocation at Barings, tells Axios, adding that investors seem to think 70% of Trump's policies are "just bluster." The other 30% is when Trump takes steps toward a more "aggressive approach" only to walk that back after getting checked by either the market or other advisors, Slaven says."
"Stocks kicked off the shortened holiday week with their worst single day performance since October. Yet it's not clear this move was all about Greenland and the tariff threat. Treasury yields climbed amid a global bond selloff, weighing on stocks, after investors had earlier fled Japanese bonds. Stocks surged Wednesday after Trump posted that a meeting with NATO secretary general Mark Rutte had produced a deal on Greenland and that he would abandon his tariff threat. The S&P 500 rose 1.2%, its biggest gain since November."
Investors have become comfortable, often treating much of the president's policy rhetoric as bluster while expecting only a minority of actions to be genuinely aggressive. When policy moves toward a more forceful stance, market reaction or advisor pushback frequently prompts retreat, but markets cannot reliably prevent policy shifts. Recent trading showed sharp volatility: a worst-one-day drop since October followed by a strong rebound after a reported deal on Greenland and abandonment of a tariff threat. Treasury yields climbed amid a global bond selloff, weighing on equities. Many investors bought the dip early, which can leave geopolitical risk underpriced and optimism fragile.
Read at Axios
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