Lynx Equity Strategies: Shift in Market Focus from Tariff Talks to Economic Impacts

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Market’s Attention Transitioning from Tariff Talks to Real Economic Outcomes

According to Lynx Equity Strategies, the market’s focus on tariffs is witnessing a notable shift—from the dramatic headlines of negotiations to the tangible economic repercussions. The firm highlighted, “The narrative surrounding tariffs is evolving away from the theatrics of negotiations towards the concrete impacts on global supply chains. It’s becoming evident that supply chains are already reacting to these tariffs.”

Lynx further emphasized that the term “supply shock” recently made headlines in leading financial journals over the weekend. This development underscores the firm’s previous alerts that “supply chains are already adjusting to tariffs, leading to a sudden contraction in the availability of goods.”

The firm remarked, “Last week, the market began to grasp the notion that the increased 145% Chinese tariff rate has significantly reduced the shipment volumes from China,” pointing out that before this, investors were primarily concerned with potential increases in consumer prices.

Lynx anticipates that the narrative surrounding supply shocks will dominate discussions this week. The firm cautioned that the market has yet to fully factor in these disruptions, stating, “The market has been more focused on the drama of tariff negotiations rather than evaluating how these tariffs are undermining equity fundamentals.”

Even for goods outside the purview of tariffs, such as PCs and servers, Lynx posits that there is a noticeable decline in production, which is affecting supply chains across various sectors.

The firm does not foresee that major companies reporting this week will aid in changing this narrative. They warned of potentially weak guidance from tech giants, stating, “We anticipate tariff-driven vulnerabilities in companies like AAPL and AMZN.” Furthermore, they predict that “an update to MSFT’s AI strategy may not benefit NVDA and associated AI entities.”

Concluding their assessment, Lynx asserted, “We expect indices in the semiconductor and technology sectors to experience a downturn.”