Investing.com - The equity market appears to be pricing some risk of targeted US tariffs being rolled out by the new Trump administration, according to analysts at Goldman Sachs.

Last week, the benchmark S&P 500 hit a record high as traders were bolstered by hopes of easing inflationary pressures in the US and eyeing a stance on international trade by Trump that has yet to include sweeping tariffs on friends and foes alike.

Trump has threatened to impose levies on several US trading partners, with Colombia being the most recent target after the South American country refused to accept military flights carrying deportees from the US. Washington backed down over the weekend, however, following Colombia's decision to accept the aircraft.

Some economists have argued that Trump's tariffs policies could reignite price pressures, and subsequently persuade the Federal Reserve to introduce possible equity-friendly interest rate cuts at a slower pace this year.

Yet the S&P 500 has advanced by around 4% in January, suggesting an early extension to a two-year string of increases in stocks.

The Goldman Sachs analysts led by David Kostin argued in a note to clients that markets seem to be betting that, roughly one week into Trump's second term in the White House, there is "little risk" of him imposing "retaliatory or universal tariffs". Instead, investors seem to wagering that Trump's levies will target specific countries or industries, the analysts noted.

In particular, they flagged that a basket of equities with supply chains in China, along with a group of automotive stocks, have lagged in the opening days of Trump's administration. The underperformance, they said, likely reflects risks related to possible US tariffs.

Meanwhile, stocks with high sales in China, which could be exposed to tit-for-tat tariffs on US goods, and a collection of equities at risk from broad global protectionist measures have both outperformed, "showing little signs of concern" over recent rhetoric around trade.

But tariffs remain a "central policy debate among market participants", the Goldman Sachs analysts said, adding that their clients have ranked "a global trade war as the biggest risk for the global economy and markets in 2025".