Post-tariff pause, investors left with a 'bull market in uncertainty'

A 90-day pause on most reciprocal tariffs sent stocks briefly soaring. Financial advisors say recession and inflation risks still loom large.

Post-Tariff Pause: Investors Left with a ‘Bull Market in Uncertainty’
By Steven Orlowski, CFP, CNPR

Wall Street exhaled — briefly — after the announcement of a 90-day pause on most reciprocal tariffs between the U.S. and its major trading partners. Markets surged in a burst of optimism, with the S&P 500 jumping nearly 3% on the news. But the celebration was short-lived. Beneath the surface, investors and financial advisors see the same risks that have been dogging the markets for months: persistent inflation, rising interest rates, and the looming specter of recession.

"We’re not out of the woods,” said Lisa Carver, a senior portfolio strategist in Chicago. “This pause might cool some of the geopolitical rhetoric, but the underlying economic fundamentals haven't changed. We’re still in what I’d call a bull market in uncertainty.”

Relief Rally or Head Fake?

The tariff pause, announced after weeks of tense negotiations, was welcomed by manufacturers, exporters, and investors alike. The temporary truce de-escalated fears of an all-out trade war that many believed could tip the global economy into recession.

But market veterans warn that this could be a relief rally — a temporary bounce amid deeper volatility. “Markets hate uncertainty, and tariffs have been a huge source of that,” said George Delgado, a New York-based Certified Financial Planner. “So sure, take them off the table for 90 days and things look better. But what happens on Day 91?”

That’s a question without a clear answer. Officials have signaled that negotiations will continue, but there’s no guarantee of resolution — and any breakdown could reignite hostilities.

Inflation: The Elephant in the Room

While tariffs have garnered headlines, inflation remains the top concern for advisors and clients alike. Consumer prices are still running well above the Federal Reserve’s 2% target, and recent data suggest the disinflation trend has stalled. The Fed, for its part, remains cautious.

“The tariff news doesn’t change the inflation story,” said Deborah Lin, an economist at Harborview Strategies. “Input costs may drop slightly if the pause holds, but labor markets are tight and services inflation is sticky. That keeps pressure on the Fed to stay restrictive longer.”

For investors, that means continued volatility in both equity and bond markets as rate policy remains in flux. Longer-duration assets, especially growth stocks and Treasuries, have swung wildly on each new data release.

Recession Fears Still Loom

The broader concern is whether the economy can avoid a hard landing. Some indicators — like strong employment numbers — suggest resilience. Others, such as contracting manufacturing activity and rising consumer credit delinquencies, paint a more worrisome picture.

“There's a real tug-of-war going on,” said Carver. “The soft landing narrative has traction, but cracks are forming. If rates stay high into 2025, we could still tip into a recession — or at least see earnings take a serious hit.”

Financial advisors are urging clients to stay diversified, hold more cash, and resist making emotional decisions based on headline-driven moves. “The best investors don’t chase the market or panic during pullbacks,” Delgado said. “They play the long game.”

A New Normal?

As the 90-day countdown ticks, market watchers expect continued turbulence. The tariff pause may be welcome news, but without a longer-term framework, it's little more than a Band-Aid on a deeper wound.

“The world’s changed since the last stable expansion,” Lin said. “We’ve got structural inflation, geopolitical fragmentation, and a Fed walking a tightrope. That’s not a market you navigate with old playbooks.”

For now, investors remain trapped in a paradox: abundant opportunity in innovation and earnings resilience, but overshadowed by macro risks that can’t be quantified. It may not be a bear market — but it’s a bull market in uncertainty.

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Contact Steven Orlowski, CFP, CNPR at Orlowski Financial Counsel for further insights and interviews on navigating the current investment climate.