As debate over tariffs and economic policy played out on Capitol Hill this week, market participants appeared far more focused on data, earnings, and technological change than on the political theater surrounding Treasury Secretary Scott Bessent’s testimony. The exchanges underscored a familiar divide between rhetoric and reality, with investors watching fundamentals even as lawmakers argued over the inflationary effects of trade policy.
During a recent interview, Dan Proft was joined by James Perry, founder and chief investment officer of Perry International Partners, to assess how markets are interpreting the administration’s approach to tariffs, artificial intelligence, and manufacturing. Perry said the reaction on Wall Street to Bessent has been largely positive, describing him as a seasoned operator with deep market experience and one of the more credible economic voices in the current cabinet.
The conversation turned quickly to market volatility following new developments in artificial intelligence, including recent breakthroughs that rattled technology stocks and fueled another short-term selloff. Perry argued that the nervousness reflects uncertainty more than deterioration, noting that rapid advances in AI have been arriving in waves, each one prompting renewed anxiety about disruption. Despite those fears, he pointed to strong labor force participation and continued job growth as evidence that dire predictions about mass displacement have not materialized.
Manufacturing was another focal point, particularly claims that the United States is on the cusp of a renaissance driven by onshoring and automation. Perry cautioned against overstating the pace of change, observing that manufacturing represents a far smaller share of employment than it did decades ago. Still, he said the trend has shifted, with automation and advanced software allowing more production to return to the U.S. in forms that emphasize productivity, resilience, and national security rather than sheer job counts.
From an investment standpoint, Perry said those dynamics help explain why he remains overweight in technology and defense. He pointed to revenue growth, profit margins, and earnings levels that are historically high, arguing that comparable opportunities are difficult to find elsewhere in the global economy. With U.S. companies continuing to post strong results and the dollar remaining relatively firm, he said markets appear more stable than daily headlines suggest.
The discussion also addressed recent turbulence in alternative assets, including sharp swings in precious metals and cryptocurrencies. Perry described Bitcoin as a speculative asset whose value depends heavily on sentiment, contrasting it with gold, which he sees as a more understandable hedge. While acknowledging the role of high-frequency trading and leverage in amplifying price moves, he said the broader takeaway is that uncertainty, not weakness, is driving volatility.
Despite concerns voiced by some investors about U.S. policy and global tensions, Perry said alternatives to the dollar remain unconvincing. Compared with Europe, Japan, China, or emerging markets, he argued the United States still offers the strongest combination of rule of law, innovation, and return potential. For that reason, he expects capital to continue flowing into U.S. assets even amid political noise.
The overall message, Perry suggested, is that investors should focus less on daily drama and more on underlying trends. With revenues growing, inflation easing, and productivity gains accelerating through technology and deregulation, he said the data point to an economy that remains on solid footing, even if the path forward continues to feel unsettled.