Video: Here Is How Tariffs Affect the Stock and Bond Markets

Both bond and stock investors should be watching the current U.S. trade negotiations with China, the EU, Mexico and Canada closely.
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Both bond and stock investors should be watching the current U.S. trade negotiations with China, the EU, Mexico and Canada closely. 

"[Tariffs] kind of have a push and pull when it comes to the bond market," said Collin Martin, a fixed income strategist with Charles Schwab. "Tariffs can slow growth but they can also lead to higher inflation. We think ultimately inflation may play a greater role - so we think that would actually lead to slightly higher Treasury yield."

Martin suggests shorter duration bonds to combat interest rate sensitivity.

As for stocks, Kristina Hooper, global chief market strategist at Invesco, suggests looking into small cap stocks, which derive more of their revenue from the U.S. and are less impacted by tariffs than large multi-national companies.

Both Martin and Hooper were panelists on TheStreet's June Trading Strategies roundtable.

To watch the entire Trading Strategies roundtable click here.