Gold bars to be exempt from tariffs, White House clarifies
Investing.com -- Equity markets appear poised to continue their upward trajectory, according to Barclays (LON:BARC) strategists, as falling rates volatility, solid corporate earnings, and persistent rotation into international stocks support the rally.
“The path of least resistance for equities remains upward,” strategists led by Emmanuel Cau said in a Friday note, citing a decline in the MOVE index and a drop in the VIX below 20 as signals of easing market conditions.
While investor sentiment remains cautious—with defensive sector positioning prevailing—strong activity data and AI-linked tech earnings continue to anchor bullish momentum.
“Nvidia’s strong results on Wednesday closed out a solid earnings season for Big Tech and the broader AI theme, which remains a key pillar of this bull market,” the strategists added.
Barclays flags policy risks as a key source of uncertainty. U.S. President Donald Trump’s shifting stance on a proposed 50% tariff on EU goods briefly unsettled markets, but investors are increasingly treating such threats as negotiation tactics.
Meanwhile, the U.S. Trade Court’s ruling against certain tariffs has complicated the White House’s trade agenda, though Barclays notes that “the President still has cards to play” by potentially targeting specific sectors like autos and semiconductors.
A further layer of complexity comes from the proposed Section 899 of the U.S. tax code, which would target “unfair foreign taxes” and could hit European companies with significant U.S. revenues.
Cau and his team note this “may well make U.S. assets less attractive to foreign investors,” raising the possibility of capital outflows and further pressure on the U.S. dollar.
But despite the macro and policy risks, Barclays sees no immediate catalyst for a sustained drawdown, especially as systematic funds have not yet fully re-engaged.
Equity outflows continued in the latest week, led by Japan and the U.S., but Europe ex-UK and EM equities saw inflows, suggesting selective risk appetite remains.
Defensive sectors also fared relatively better, reinforcing the sense that while valuations are high, investor positioning remains risk-aware.
“In fact, activity data is holding up, and despite a rather soft US Q1 GDP print, global CESI is back into positive territory, which bodes well for earnings,” the strategists continued.
They note that next week’s payroll report will be an important indicator of underlying economic momentum, especially as recent jobless claims have started to rise.