JPMorgan sees signs of 'Trump exhaustion.' Why that could keep stocks stuck in a range

CNBC

25-04-2025

The volatility on Wall Street has cooled as the end of April nears, but that may be more about a lack of true catalysts and a growing skepticism of President Donald Trump than a rebound in investor optimism. JPMorgan strategist Dubravko Lakos-Bujas said in a note to clients Friday that, while risks from tariffs appear to have come down in recent days, many investors seem to have "Trump exhaustion" and are hesitant to jump fully back in to stocks even on positive headlines. Examples of the market tuning out the White House came on Friday, as several contradictory pieces of tariff news came and went, causing at most a short-term ripple for stocks. Those tidbits included a newly published Time Magazine interview from Tuesday, with the president saying it would be "total victory" if the U.S. has high tariffs of 20% to 50% on foreign countries a year from now. Then, in two different sessions with reporters on Friday, Trump said "we are very close to deal" with Japan but needed "something substantial" from China to lower tariffs. All that led to a modest gain of less than 1% on the day for the S & P 500 , which is still down for the month even after a big week . At this point, investors may need to wait for more concrete information on the economy and trade before the recent uptick for stocks can become a true rally, or revert back to a recessionary market. "In the very short term, the equity pain trade likely remains to the upside as the market prepositions on tariff de-escalation. However, as the summer approaches, we could start to see some softness in activity due to aggressive tariff related front-loading, lagged effects of other policies, and lower business investment activity," Lakos-Bujas wrote. The strategist said this dynamic could keep the S & P 500 "range bound" between JPMorgan's year-end base case of 5,200 and bull case of 5,800. The index was trading around 5,500 for much of Friday — the dead center of that range. .SPX 5D mountain The S & P 500 traded around 5,500 for much of the day Friday. Wells Fargo strategist Christopher Harvey said in a note Friday that he still sees proof that the market is reacting to daily chatter from the Trump team, but the result is still a set area on the chart for the S & P 500 to bounce around. The bottom line is that the market needs real proof of progress on the trade front for a breakthrough, not just presidential commentary. "We have posited there is a 'Trump collar' keeping the SPX in a 5,000-5,600 range in recent weeks. When markets are excessively weak, we should expect to hear a positive sound bite from the Administration; the rally is then arrested when a White House official takes the opportunity to lean back into tariff rhetoric," Harvey wrote. "We are maintaining this 5,000-5,600 SPX collar until there is tangible evidence of tariff negotiation progress, not merely reports of 'constructive dialogue.'" — CNBC's Michael Bloom contributed reporting. Get Your Ticket to Pro LIVE Join us at the New York Stock Exchange! Uncertain markets? Gain an edge with CNBC Pro LIVE , an exclusive, inaugural event at the historic New York Stock Exchange. In today's dynamic financial landscape, access to expert insights is paramount. As a CNBC Pro subscriber, we invite you to join us for our first exclusive, in-person CNBC Pro LIVE event at the iconic NYSE on Thursday, June 12. Join interactive Pro clinics led by our Pros Carter Worth, Dan Niles, and Dan Ives, with a special edition of Pro Talks with Tom Lee. You'll also get the opportunity to network with CNBC experts, talent and other Pro subscribers during an exciting cocktail hour on the legendary trading floor. Tickets are limited!