Investors watch as tariff deadline approaches amid rising US stocks

The temporary suspension of US import tariffs on key trading partners will expire this week. If trade tensions between the countries do not escalate after July 9, it could be positive for American stock markets, Reuters reports.

Last Wednesday, Donald Trump announced a deal with Vietnam. It sets lower 20% duties on many goods exported from the country. Meanwhile, talks with Japan appear to have stalled, the news agency notes.

Amid sweeping political changes, the US economy remains resilient, defying many experts' forecasts. The S&P 500 has risen roughly 26% since April 8.

After six months of volatility, the index is entering a historically strong period. According to LSEG data analysis, July has been the S&P 500's best-performing month over the past 20 years, with an average return of 2.5%.

However, investors remain cautious. They are closely watching economic reports, particularly inflation data, and awaiting the Fed's decision on the future path of monetary policy. Right now, institutional investors are confronted with a pivotal question: whether to believe in the index rally or not, Reuters adds.