Why Wall Street still isn’t taking Donald Trump seriously

“I don’t think that markets are putting enough weight on his words and his actions to date,” Zandi said. “He clearly is willing to engage in brinkmanship with the Chinese.”

Many believe that Trump will be dissuaded from adopting any truly protectionist policies. Senior GOP lawmakers including House Speaker Paul D. Ryan (R-Wis.) have rejected the idea of tariffs. In an interview last week on CNBC, Wilbur Ross, Trump’s nominee for secretary of commerce, suggested that tariffs would be a last resort.

“Everybody talks about tariffs as the first things. Tariffs are the last thing. Tariffs are a part of the negotiation,” Ross said.

Instead, investors are optimistic that Trump and Congress will substantially reduce taxes while spending more on infrastructure and defense, putting more money into the economy and juicing corporate profits.