The Trump administration has seriously backtracked on the April 2 announcement

The U.S. stock market has already priced in backtracking on the large and sweeping “liberation day” tariffs announced by President Donald Trump on April 2, making it difficult for the market to keep up its recent rally, according to Sevens Report Research.

“The Trump administration has seriously backtracked on the April 2 announcement, including a delay while negotiations take place and exempting major categories of imports,” said Tom Essaye, founder and president of Sevens Report Research, in a note Monday. As an example of tariff exemptions, Essaye pointed to computer chips, electronics, pharmaceuticals and automobiles.

“The reality of the past month post-‘liberation day’ hasn’t been as bad as feared and the market has recouped those losses,” said Essaye. “However, I do not think these events are enough to sustainably propel the S&P 500 forward and I am sticking to my general 5,100-5,500-ish range.”

Investors, worried that large tariffs will place a drag on the U.S. economy while increasing the cost of goods for consumers, have been monitoring the White House’s negotiations with its trading partners. But with backtracking on tariffs already priced into the market, Essaye cautioned that “we could even see a ‘sell-the-news’ move once some trade deals are announced.”