"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.

But the outlook for many top U.S. trading partners has yet to come into clear focus. Trump has threatened, for example, to raise tariffs on Canada to 35% from the current 25% if the two countries don’t strike a deal by Friday. And a 90-day truce between the U.S. and China expires in mid-August, at which point Trump’s tariffs on China could soar.

Barclays first-half profit rose by a better-than-expected 23%, the British bank said on Tuesday, with its markets business reaping bumper returns from the frenzied trading activity sparked by U.S. President Donald Trump's trade tariffs.