“So much of what the administration has said, it hasn’t done,” Matthews said. “I’ve read several comments from investors that they’re just really not listening to what’s coming out of the White House anymore.”

He said the trade announcement could be “bluster, rather than something they’re really going to do.”

Matthews also noted that the U.S. may not be driving China trade as much as it once did, with the mainland’s trade growth potentially coming from other sources.

Indeed, in February, Capital Economics estimated that if all trade between the U.S. and China halted immediately, China would only face a dent of around 3 percent of gross domestic product (GDP), including knock-on effects to employment and consumer spending.

There was another reason that stocks weren’t reacting much: Investors were likely watching corporate earnings.

For calendar second quarter, 72 percent of the S&P companies that had reported as of Wednesday morning beat bottom-line expectations and 68 percent on the top line, according to data from Thomson Reuters I/B/E/S.

Elms said she expected that eventually stock markets would have to respond to trade frictions, but she also noted the move in the U.S. dollar was likely reflecting those concerns.

The dollar index, which measures the greenback against a basket of currencies, has fallen to as low as 92.885 this week, from as high as 103.820 in January.

“The dollar story is partly because foreigners get this problem. I’m not sure domestic investors quite grasp it,” she said.

On the other hand, Matthews said the dollar’s drop was partially due to the political chaos within the Trump administration.


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