Why the Stock Market Just Won’t Cave to Tariffs

The stock market’s rally is largely rooted in one major assumption: Tariffs won’t spur too much inflation. Driving the gains are companies’ stronger-than-expected outlooks this earnings season and the expectation that the Federal Reserve will cut interest rates. There’s inherent risk in that bet, given that both the market and the Fed thought the postpandemic inflation in 2021 wouldn’t last.