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As the biggest U.S. retailer, Walmart is a bellwether for the American consumer. As a big importer of Chinese goods, it’s also an indicator of how financial markets are thinking about incoming President Donald Trump’s policies on tariffs. The company’s quarterly results released on Tuesday – and the reaction of shareholders – suggest investors are betting it can weather another outbreak of trade hostilities.

The $700 billion company said revenue for the quarter ending October increased 6% year-over-year to $170 billion. More people, especially those in higher-income brackets, are shopping at Walmart’s stores, and on its website: e-commerce sales popped by more than a quarter. The holiday season is looking rosy. The company led by Chief Executive Doug McMillon raised its full-year forecast for the third time. It now expects net sales to rise by as much as 5.1% and operating income to jump as high as 9.3%.

Look to next year, however, and prospects are harder to predict. The next occupant of the Oval Office is keen to promote and expand manufacturing in the United States. He has proposed imposing a universal levy of up to 20% on all goods imported into the country and a 60% tax on materials shipped from the People’s Republic. In theory that would hurt Walmart. While the company has been busy diversifying its supply chain away from China, roughly 60% of its shipments still come from the country, according to Reuters.

If Trump follows through on his campaign promise, Walmart has ways to deflect the blow of tariffs. Its purchasing clout could help it to squeeze suppliers. It can shift more production to other locations. And it can pass on higher costs. Walmart CFO John Rainey said that an increase in levies would mean higher prices for shoppers.

The retailer has a track record of navigating challenges. In the past seven years it has endured Trump’s first round of tariffs, the global pandemic, a lack of inventory, too much inventory, and high inflation. Yet its financial performance has been remarkably steady. Analysts expect it to report a 24% gross margin this year, according to LSEG. In 2015 that figure was 25%.

Shares of Walmart touched an all-time high on Tuesday, after beating the S&P 500 Index so far this year with a 60% rise. Including net debt, investors now value the enterprise at 17 times its expected EBITDA for the next 12 months. That’s higher than Amazon.com and its own five-year median average. The enthusiasm suggests investors think Trump’s toll tax will probably be transitory. It also leaves little room for disappointment.

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Walmart on Nov. 19 reported that revenue for the quarter ending Oct. 31 rose 5.5% year-over-year to $170 billion. Operating profit increased 8.2% to $6.7 billion. The U.S. retailer raised its annual forecast and expects sales to increase up to 5.1% and operating profit to rise as high as 9.3%. Walmart shares rose 4% to $87.36 by midday in New York on Nov. 19.

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