On April 22, 2025, Wall Street witnessed signals of easing trade tensions. President Trump and Treasury Secretary Scott Bessent both hinted that 145% tariffs on Chinese goods could be reduced in the near future. Markets responded positively with SPDR S&P 500 ETF SPY adding 2.6% on the day, SPDR Dow Jones Industrial Average ETF Trust DIA gaining 2.7% and Invesco QQQ Trust QQQ advancing 2.6%.
Bessent: Current Tariffs Are Unsustainable
Treasury Secretary Scott Bessent also struck an optimistic tone during a private investor summit, suggesting the current state of US-China tariffs is not viable in the long term. He echoed sentiments he shared in an earlier interview with Yahoo Finance, saying he expects more "clarity" on tariffs in the months ahead.
Meanwhile, Vice President JD Vance visited India on April 22, 2025. Discussions included cooperation in technology, defense, and energy, with the White House noting “progress” on several fronts.
Tariff Pauses and Exemptions Under Consideration
President Trump is also exploring pauses on certain tariffs, particularly on auto imports and some consumer electronics. While he insists tariffs will eventually be enforced, the administration is leaving room for temporary exemptions. Despite the discussions, the 10% baseline tariff on affected imports into the United States—introduced on April 5—remains in effect.
US-UK Trade Talks: Auto Tariffs May Be Cut
The Wall Street Journal reports the United States is considering reducing auto tariffs on UK exports from 10% to 2.5% as part of ongoing trade negotiations. British Finance Minister Rachel Reeves is scheduled to meet with Secretary Bessent to advocate for a broader agreement that would reduce or eliminate Trump's previous tariffs on British goods, as quoted on Yahoo Finance.
High Beta & Momentum ETFs to Gain Ahead?
Most exchange-traded funds (ETFs) will likely see a nice boost from the likelihood of trade de-escalation. However, high-beta and high-momentum ETFs, in particular, are expected to outperform in the near term, making them compelling options for short-term investors.
High-beta ETFs experience larger gains than the broader market counterparts in a bullish market, while momentum investing looks to capture profits from buying hot stocks.
These include Invesco S&P 500 High Beta ETF SPHB, iShares MSCI USA Momentum Factor ETF MTUM, Invesco Dorsey Wright Momentum ETF PDP, Invesco S&P MidCap Momentum ETF XMMO and Invesco S&P SmallCap Value with Momentum ETF XSVM. These ETFs gained 2.9%, 3.1%, 2.9%, 2.8%, and 3.1%, respectively on April 22, 2025.
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Invesco QQQ (QQQ): ETF Research Reports SPDR S&P 500 ETF (SPY): ETF Research Reports SPDR Dow Jones Industrial Average ETF (DIA): ETF Research Reports iShares MSCI USA Momentum Factor ETF (MTUM): ETF Research Reports Invesco S&P 500 High Beta ETF (SPHB): ETF Research Reports Invesco Dorsey Wright Momentum ETF (PDP): ETF Research Reports Invesco S&P MidCap Momentum ETF (XMMO): ETF Research Reports Invesco S&P SmallCap Value with Momentum ETF (XSVM): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).
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