Wall Street keeps flinching as “hypothetical” scenarios investors should have prepared for months ago show that they have teeth. Tariffs are raising trade barriers around the world and corporate executives are focused on how to pivot their supply lines to keep all the wheels turning.

We’re seeing a record number of mentions of tariffs on conference calls. It’s not just a few industries, either: it’s across the board. From the companies building our cars to the ones stocking our shelves, everyone’s feeling the pinch.

What does this mean for consumers? Higher prices. Companies are admitting tariffs will lead to increased costs, and those costs are going to get passed along to the consumer. 

We’ve seen it with companies like Best Buy, where a significant portion of their products come from countries facing these tariffs. They’re being upfront about the potential for price hikes.

And it’s not just retail. Manufacturers are feeling it too. The cost of raw materials is going up, and that’s reflected in the economic data. The Institute for Supply Management recently released a report showing a big jump in the Prices Paid index, signaling that manufacturers are paying more for the goods they need.

The market’s reacting too. We’ve seen stocks whipsaw on the constant news of tariff changes. Just look at the automotive sector. When the White House announced exemptions for certain countries, those stocks rallied. It’s a clear indication of how sensitive the market is to these developments.

Equity strategists are also keeping a close eye on the situation. They’re warning that tariffs could put a dent in earnings for the S&P 500. Every quarter these levies stay in place, it could mean a hit to earnings. That’s a serious concern for investors.

But hang on. We’re investors.

The world is turbulent. But in the last four months, the fundamental outlook has not appreciably deteriorated. Back in November when trade war was a toss-up, consensus was for 5.5% revenue growth across the S&P 500 this year . . . a sign of a healthy global economy translating into double-digit earnings growth.

Now that top line target has dropped a full 0.1 percentage point to 5.4%, which is still a sign of a healthy global economy. And it still points at double-digit earnings growth, enough to push stocks higher over the coming year without bending multiples at all.

How about those multiples? Back then the S&P 500 traded at 21.3X projected earnings. Now that valuation has dropped to 20.7 . . . the market hasn’t pushed any farther into bubble territory but has actually gone in the other direction.

None of that is worth cheering for investors right now of course. But it’s worthwhile to check our impulses and see that while the mood has swung dramatically, the material realities haven’t.