The high rates that we're seeing in these letters suggest trade deals have not yet materialized, and the administration is looking for progress over the next few weeks.

It's July ninth, and the tariff clock is ticking. President Trump has announced new country level tariffs set for August one with more likely to follow. He's also targeting key sectors, fifty percent on copper and two hundred percent on pharmaceuticals expected sometime next year. And this time, he says there will be no more extensions.

But despite all of that, markets are surprisingly calm.

I wanna bring in Marta Norton now. And, Marta, explain to us why aren't investors reacting? What's behind the calm here? Well, the extension takes the sting out of July ninth. However, the high rates that we're seeing in these letters suggest trade deals have not yet materialized, and the administration is looking for progress over the next few weeks that didn't occur during that first three month pause. So there's a real risk in my mind that this leads to some complacency in markets.

And there's even a name for these pauses and rolling deadlines, TACO, Trump always chickens out. It's that idea that if markets wobble, policy walks back. So do you think, Marta, that investors are relying too much on that, Pat?

It does seem to be the case. Valuations are remarkably high across the board, and they don't just ignore the developments of the day, but they really ignore the size of the change that we've seen over the course of the year even if the the rates don't materialize as they're outlined in the letters today.

So let's dig into the impact, Marta. What sectors are most exposed if these tariffs go into effect?

Well, it's hard when we think about sectors not to talk about what's happening in copper, what's happening in pharma.

Obviously, a lot of volatility. Copper seeing in the US a massive spike in prices after that fifty percent tariff announcement, pharma selling off. That shows that there are still jitters in the market, though they're contained to the sectors. But should those tariffs go through, of course, there will be a broader economic effect. Yeah.

So far, the economic impact seems relatively muted, but that could change quickly.

If the negotiations break down and these tariffs are actually, implemented, if they kick in on August first, what could it mean for markets?

What strikes me that market pricing is assuming that everything we're seeing today is more negotiation tactics. And, of course, the market recovery that we saw after that massive sell off around April second was really predicated on the pause. The ninety day pause trumps walk back. So an actual implementation of these tariff rates could certainly catch the market off guard.

And, And, Marta, with everything else going on this week, immigration headlines, the Doge executive order, how should investors be thinking about the bigger picture here?

Well, a lot of the news coming out of Washington, as you mentioned, with immigration, with the the ability to move forward on slimming the federal workforce, a lot of that focuses in on the labor market and is pushing on supply and pushing on potentially the unemployment rate.

So the labor has these additional pressures. And it's one more reason, combined with the tariffs and the news that we're seeing there, that the Fed may continue to extend its timeline to assess the economic impact. That could mean that rate cuts are pushed further into the future and would really move against market pricing today, which is beginning to coalesce with greater conviction around the September cut.

So for investors, what's the key takeaway as we look beyond today's head So a few things jump out at me.

First, the importance of not trading a gut feel or headlines is especially important. But another consideration is really not to get complacent. Market price action today is very reminiscent of pre liberation day where markets were very dismissive of all the tariff noise, setting the stage for the sell off that we saw in early April. Valuations are high in our estimation, and there's very little room for disappointment.

Yeah. Bottom line, the tariff headlines are big, but markets aren't blinking yet. Great perspective as always, Marta. Thank you so much. If you'd like to take a deeper dive, check out Marta's q three outlook where she unpacked these themes and much more. You'll find her research at empower dot com. Have a great rest of the week, and we'll see you soon.