Trump's Tariffs Will Only Boost the Allure of Market Havens

In particular, the continuing threat of restrictions on imports from a wide range of trade partners will provoke retaliation affecting U.S. consumers, financial markets and activities of multinational companies. Investors should watch for the resulting volatility to discourage investments in equities and prompt demand for high-grade debt. Market volatility this week has been driven largely by developments in Italian -- and to a lesser extent, Spanish -- politics. The CBOE Volatility Index, or VIX (also known as the “fear index”), surged by the most since March on Tuesday on the prospect of fresh elections as the country’s President and the populist coalition hoping to form the next government disagreed on the new Finance Minister.