Global investors are displaying notable calm ahead of U.S. President Donald Trump’s Wednesday tariff deadline, suggesting a marked shift in sentiment from the trade-war jitters that previously rocked markets. Despite Trump’s announcement of tariffs as high as 70% on imports from 12 countries starting August 1, markets remain buoyant, seemingly confident that worst-case scenarios are now unlikely.

“The market has gotten much more comfortable, more sanguine when it comes to tariff news,” said Jeff Blazek, co-CIO at Neuberger Berman. “Investors now assume the deadlines are flexible, and the actual fallout limited.”

This indifference comes even as the 90-day tariff pause, first declared in April, is set to expire. Trump’s administration has struggled to finalize major new trade deals—making modest gains with the UK and Vietnam while talks with India, Japan, and the EU remain stalled.

Yet, global equities tell a different story. The MSCI World Index has surged 24% since April 2, reaching record highs. U.S. markets are also on a roll, with the S&P 500 and Nasdaq setting new all-time records and the STOXX 600 in Europe gaining 9% over the past quarter.

Much of the rally is attributed to investor optimism around a recently passed U.S. tax and spending package, which locks in Trump’s 2017 tax cuts. While equity markets welcomed the move, bond markets are flashing caution, with concerns that the package could add over $3 trillion to the national debt, already at $36.2 trillion.

The U.S. dollar has also been under pressure. The dollar index is down 11% in 2025—the steepest first-half drop since 1973—due to inflation worries and mounting fiscal concerns. U.S. Treasury yields have risen as bond investors demand higher returns to compensate for perceived risks.

Analysts like Rong Ren Goh of Eastspring Investments see Trump’s tariff letters more as “aftershocks” than a fresh seismic event. “Even if tariffs rise to 70%, they lack the surprise factor of April’s ‘Liberation Day’ announcement.”

Still, risks remain. John Pantekidis of TwinFocus noted that while equity outlooks are broadly positive, higher interest rates could derail market momentum if inflation or debt concerns intensify.

For now, though, global markets appear to be banking on resilience, policy fluidity, and abundant liquidity to carry them through the remainder of the year—tariffs or not.