The trade truces are undoubtedly bullish — but mask unresolved issues: Morning Brief

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If investors have already glimpsed a preview of how the market can climb out of its funk — a reciprocal tariff pause — the start of the trading week was a reminder of what it will take for Wall Street to hit its stride: more trade deals.

But just because the solution seems straightforward doesn’t mean it will be easy to come by. Stocks rallied on Tuesday after the European Union agreed to fast-track trade talks with Washington, a diplomatic breakthrough that arrived just as tensions were rising. President Trump announced the US would delay the 50% tariffs on the bloc until July 9.

The dynamics of piecemeal trade deals also highlight the limitations of advancing global tariff policy through one-offs, postponements, and agreements to talk further: They don’t scale. Which has some advantages and disadvantages.

Every meaningful sign that the US is backing away from a high-tariff regime — from the China truce to the EU delay — reveals how much more work needs to be done. And while uncertainty may be dissipating, there’s plenty left for the market to stew over.

Even the existing trade victories, while sending powerful and now almost regular bullish signals to the stock market, may also be masking unresolved issues at play.

As Apollo Global Management chief economist Torsten Sløk pointed out this week, there are still no signs of a rebound in trade between the US and China. Two weeks after the tentative trade deal, container traffic hasn’t strongly returned, he said, suggesting the existing tariffs are still too high, or that US companies are holding out for potentially better tariff conditions to emerge. (Disclosure: Yahoo Finance is owned by Apollo Global Management.)

But the semblance of change may be enough, at least for public sentiment. A fresh reading on consumer confidence Tuesday marked the first major shift in sentiment as consumers embraced newfound optimism amid new tariff developments. We don’t yet have long-term clarity on trade policy. But positive momentum? That works too.

It’s true that the dramatic, game-show aspects of announcing trade deals create a steady drip of good news for the market. And any progress, however slight or provisional, probably means less chaos for investors.

But in an environment where the only meaningful catalyst for stocks is a break from tariffs, there will eventually need to be a true resolution, which might also be the hardest thing to achieve.