"We still believe the most likely outcome is slow growth and firm inflation: Not a recession, but a backdrop where the adverse effects of trade and immigration controls on growth outweigh the boost from deregulation and fiscal largesse," Morgan Stanley strategist Michael Zezas wrote.

Wall Street’s reaction to President Trump’s announced tariffs has softened significantly after recent trade agreements, notably with the European Union,

The economy was supposed to crumble. The trade war was expected to escalate out of control. Markets were forecast to plunge. None of that has happened. But Trump’s early trade victory may be short-lived.