The opinions expressed here are those of the author, a columnist for Reuters.

By Jamie McGeever

ORLANDO, Florida, April 30 (Reuters) - The first 100 days of Trump 2.0 were incredibly turbulent for world markets, as tariff-fueled chaos wiped trillions of dollars off U.S. asset prices. What will the second 100 days of President Donald Trump's administration look like? They will probably be less volatile, but markets may be underpricing the downside risk.

Wall Street and the dollar ended Trump's first 100 days sharply lower as investors around the world reassessed their willingness to hold U.S. assets.

Even though many markets, including the S&P 500, hit record highs in the month after Trump's inauguration in January, U.S. stocks ended up having their worst first 100 days under any president since Richard Nixon's second term in 1973, and the dollar index ended the period down nearly 10%.

But several global markets have rebounded from their lows, as Trump has backed away from some of his more extreme policies and dialed down his rhetoric. The MSCI World index is now off only 3% since inauguration day. Chinese, British and European stocks are essentially flat, while the MSCI Asia ex-Japan index, Germany's DAX and India's Sensex are all up between 2% and 7%.

Some of this relief is justified, but markets may be a bit too optimistic about what the next 100 days have in store.

ROCKY ROAD

Peak tariff chaos is probably in the rear-view mirror, but even if global levies are reduced, they will still be the highest in decades. And trade tensions between China and the U.S. – the world’s two largest economies – likely won't ratchet down quickly. Markets don't appear to be priced for the trade disruption and economic slowdown this is apt to cause.

Global equity valuations have cheapened since January, but not by much, and European multiples are beginning to tick back up again. Meanwhile, 12-month forward earnings forecasts for the S&P 500 continue to rise to new highs, nudging $280 per share.

Does this point to confidence in the resilience of the U.S. and the global economy or complacency? Keith Lerner, chief investment officer at Truist, reckons it's the latter, especially given how narrow the scope is for sizeable U.S. fiscal and monetary policy support.

Lerner estimates the near-term potential for the S&P 500 is no more than 5% on the upside, and greater than 10% on the downside.

"Markets have gone from pricing in a decent amount of bad news at the recent lows, to providing less of a buffer should we have a rockier road ahead," he wrote on Tuesday. "The risk-reward appears less attractive at current levels."

The sudden collapse in U.S.-China trade, record uncertainty, and months of limbo for households and businesses while the U.S. negotiates dozens of trade deals suggest downward global growth revisions like the International Monetary Fund's last week may be too benign. Even if recession is avoided, stagflation may not be.

PEAK TRUMP

The bullish case, of course, is that the first 100 days marked "peak Trump", meaning the shock, chaos, and selling across markets won't be repeated in the coming months. Tensions with U.S. rivals and allies will thaw, and the world will return to something resembling normalcy.

Perhaps some of this is playing out. Elon Musk's influence on White House policy is waning, as the Tesla chief has scaled back his DOGE time commitment. Trump has tempered his attacks on Federal Reserve Chair Jerome Powell, and the U.S. administration is sounding more conciliatory on tariffs.

In that light, one could argue that U.S. "Big Tech" is now cheap and doubts over the dollar's safe-haven status are overblown. The U.S. economy remains the world's most innovative and dynamic, and there are huge fiscal boosts coming down the pike in Europe and China.

Time to buy then? Not so fast. As a recent JP Morgan survey notes, even though investors may be hopeful for de-escalation in the trade war, they also fear "lasting damage" is being done by the administration's efforts to create a new world order. They also have "very little conviction on the (administration's) endgame" or which asset classes to own.

Low conviction, high uncertainty and fears of long-term damage don't make for a particularly bullish backdrop, even if the next 100 days are a lot less tumultuous than the first.

(The opinions expressed here are those of the author, a columnist for Reuters.)

(By Jamie McGeever; Editing by Alex Richardson)

((jamie.mcgeever@thomsonreuters.com; Reuters Messaging: jamie.mcgeever.reuters.com@reuters.net))