Stock Market Cheer Amid Trump Tariffs Is Masking a Deeper Fear. Here’s What.

(ANGELA WEISS/AFP via Getty Images)

The stock market is full of contradictions right now.

It may seem like good news that the latest Bank of America fund manager survey showed investor sentiment at the highest since February. But the market plunged after that optimism, and now professionals are seeing an overheated market.

It’s easy to make the case for why traders might be cheerful. President Donald Trump’s tariffs have led to a lot of ups and downs this year, yet investors are betting they won’t be that bad for companies. To be sure, extra taxes are never good—but to date they aren’t the catastrophe for stocks some had feared. And Trump’s extension of the China talks deadline suggests he will be pragmatic in a crunch.

The same sentiment applies to the arrangement of the U.S. government taking a cut of semiconductor sales to China. It’s not great for Nvidia and AMD, but better than not being able to sell chips to China at all. Federal Reserve interest rates are also expected to come down, which should help shares as well.

But the survey is not all rosy. Fund managers say they don’t see economic growth suddenly collapsing, yet 70% say they expect stagflation —loosely defined as weaker-than-normal growth and faster-than-normal inflation. That’s not good. Tuesday’s consumer price index data add to the picture.

Most worryingly, a vast majority —91%—say stocks are currently overvalued, which is a sign investors might be getting nervous about driving prices even higher. The edge has started to come off the AI trade—a juggernaut for markets. Software firm BigBear.ai missed earnings estimates and Monday.com beat them this week, but both stocks plunged after reporting.

The S&P 500 is still close to a record high. It may go even higher. But the main takeaway is that the pros have nagging doubts about the outlook even if they appear confident.

—Brian Swint

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Trump Extends China’s Trade Deal Deadline to November

Another deadline has been extended in President Donald Trump’s continuing trade negotiations with countries from around the world. This time, the hard stop for a deal with China has been pushed to Nov. 9 from today as the two sides continue to wrangle over terms after a third meeting in Stockholm last month.

• That means the tariff rate on U.S. imports from China will remain at 30%, rather than boomerang to a higher level, at least for now. Trump also said Monday he would not impose a tariff on imported gold, potentially good news for Switzerland, the world’s largest gold refining center. Swiss imports face 39% tariffs.
• Trump said earlier Monday that they had been dealing “very nicely” with China as the two sides continue to dance around a potential deal. Paul Triolo from consultancy Albright Stonebridge Group says there appears to still be wrangling behind the scenes to get something more.
• Those extras could include more agricultural purchases and more negotiation on export restrictions that are limiting China’s access to critical technology and China’s hold on rare earth minerals. Trump said on social media, for example, that China should quadruple its purchases of U.S. soybeans.
• Tied up in the trade negotiations is the back and forth over unresolved issues related to China’s access to critical semiconductor technology, including AI chips. The White House confirmed the details of an unprecedented revenue-sharing pact that allows Nvidia and AMD to sell certain GPU chips to China.

What’s Next: Trump’s tariffs are trickling into the U.S. economy. Goldman Sachs strategists led by Jan Hatzius say U.S. consumers had only absorbed 22% of the tariff costs through June, but that their share would soon rise to 67% if recent tariffs follow the same pattern as earlier ones.

— Anita Hamilton, Reshma Kapadia, and Brian Swint

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Trump Stamps His Mark Hiring New Statistics Chief

President Donald Trump is to stamp his mark on a new hire to lead the Bureau of Labor Statistics. He said late Monday that he was planning to pick Heritage Foundation chief economist E.J. Antoni, a longtime critic of the BLS, to head up the fact-finding agency.

• “Our Economy is booming, and E.J. will ensure that the Numbers released are HONEST and ACCURATE,” Trump wrote in a post on Truth Social. “I know E.J. will do an incredible job in this role.”
• Trump fired BLS Commissioner Erika McEntarfer last month over what he alleged was a “rigged” jobs report. The BLS had reported that the U.S. added 73,000 jobs in July, and revised payroll gains for May and June down by 258,000. While the size of the revisions was a surprise, such swings in the monthly jobs numbers and subsequent revisions are nothing new.
• Antoni has previously criticized the BLS’s data collection methods, and called for McEntarfer to be fired hours before Trump dismissed her. The Wall Street Journal reported on Sunday that former White House chief strategist Steve Bannon was backing Antoni to lead the agency.
• “There are better ways to collect, process, and disseminate data—that is the task for the next BLS commissioner, and only consistent delivery of accurate data in a timely manner will rebuild the trust that has been lost over the last several years,” Antoni said in a post on X earlier this month.

What’s Next: Antoni’s nomination is a sign Trump wants to see sweeping changes at the BLS following the soft July jobs report. The economist won’t be able to take over straight away, though, as the position requires Senate confirmation.

— George Glover

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Ford’s EV Revamp Aims At Lighter, More Affordable Models

Ford Motor is revamping its manufacturing process to build lighter, more affordable electric vehicles, even as EV sales for the industry have been under pressure. The inventor of the Model T is reinventing itself to compete better with Tesla and China’s BYD, including developing a $30,000 electric pickup by 2027.

• Ford is investing $2 billion to build the new vehicles on a “universal EV platform” at its assembly plant in Louisville, Ky. The platform can make EVs 40% faster than current processes, with 20% fewer parts. Overall Ford is spending $5 billion. It will create about 4,000 jobs.
• Ford’s new midsize EV pickup will seat five, with more passenger space than a Toyota RAV4. It will use cheaper lithium iron phosphate batteries. Doug Field, a former Tesla and Apple executive who is Ford’s chief EV, digital, and design officer, called it a bold and difficult undertaking.
• Ford’s EV division, called Model e, lost $1.3 billion in the second quarter, while vehicle sales increased 128% to about 60,000 units. But things are trending up. The per-car loss—operating profit divided by unit sales—fell to roughly $22,000 a car from $44,000 a year ago.
• EV buyers can qualify for the federal purchase tax credit worth up to $7,500 for just a few more weeks because the benefit was eliminated in the Republican tax-and-spending law signed by President Donald Trump. The benefit expires at the end of September.

What’s Next: Ford is billing this shift as its latest Model T moment. It didn’t provide profitability goals during the announcement on Monday, but making money from the Model e division will depend on a combination of attractive models, higher sales volumes, and lower costs.

— Al Root and Janet H. Cho

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Paramount Skydance Gains Exclusive Rights to UFC Events In U.S.

Paramount Skydance’s seven-year, $7.7 billion deal with TKO Group Holdings gives Paramount exclusive media rights to all Ultimate Fighting Championship events in the U.S. starting in 2026. Paramount also aspires to buy the rights to international UFC events in the future.

• The Paramount+ streaming platform will show UFC’s full slate of 13 marquee events and 30 “Fight Nights,” with select events simulcast on sister network CBS on Saturday nights. UFC previously distributed its mixed martial arts events through a pay-per-view model rather than streaming subscriptions.
• For Paramount CEO David Ellison live sports is the cornerstone of a broader strategy after Skydance’s purchase of the media company. Seaport Research Partners analyst David Joyce expects the deal to further advance the streaming platform and enhance the merger benefits.
• TKO has been talking to Paramount since its exclusive negotiating window with Disney’s ESPN expired. Netflix at one point explored bidding for UFC rights, The Wall Street Journal reported. ESPN last week signed a five-year deal valued at $1.6 billion for TKO’s World Wrestling Entertainment content.
• TKO President and Chief Operating Officer Mark Shapiro said TKO was attracted to the opportunity to show UFC on CBS and called Paramount’s willingness to abandon pay-per-view a “game-changer.” Ellison expects the deal to increase engagement, revenue, and subscriptions.

What’s Next: Ellison told investors last week that Paramount planned to scale up its streaming platform and integrate artificial intelligence into its studios division. Paramount is a recent Barron’s stock pick, and David’s father, Oracle founder Larry Ellison, is the world’s second-richest person after Elon Musk.

— George Glover, Nate Wolf, and Janet H. Cho

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Berkshire Hathaway’s Mystery Stock Could Be Unveiled This Week

Berkshire Hathaway has been building a stake in a mystery stock—very likely an industrial company. While Berkshire followers like to guess what Warren Buffett and his investing pros are up to at the conglomerate, the mystery could be answered this week with the quarterly holdings disclosure.

• The total size of the holding could be almost $5 billion, based on clues in Berkshire’s 10-Q reports for the first and second quarters. Berkshire also could disclose that it made further sales of Bank of America stock in the second quarter.
• The 45-day deadline for big portfolio managers to disclose their U.S.-listed equity holdings as of June 30 to the Securities and Exchange Commission is Thursday. When Berkshire reported its equity holdings as of March 31, it disclosed that it requested confidentiality on one or more stakes it was building.
• Berkshire was a light buyer of stocks in the second quarter, purchasing nearly $4 billion, while selling about $7 billion, indicating it continued to pare its equity portfolio, based on information in the 10-Q for the period and Barron’s analysis.
• Berkshire has nearly $300 billion divided into financial, consumer, and “commercial, industrial and other.” In the first quarter, the commercial and industry cost basis rose nearly $2 billion, but the May disclosure didn’t include any notable purchases. In the second quarter, the category’s cost basis rose $2.8 billion.

What’s Next: The second-quarter 10-Q indicates Berkshire may have continued to pare its Bank of America investment. Details pointing to the size of Berkshire’s realized equity gains signal that Berkshire might have sold another $4 billion or so of Bank of America, Barron’s estimates.

— Andrew Bary

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—Newsletter edited by Liz Moyer, Patrick O’Donnell, Rupert Steiner