"The constant churn of policy announcements, exemptions, postponements and denials mean investors re-price each day where they consider risk to be relative to the day before. This then shifts the goalposts for judging growth and profitability forecasts.
For all the noise, however, the market still seems positioned for a hopeful outcome. Stocks are not even priced right now for a mild downturn. “For the S&P 500 to rise to where the consensus is now, Trump would need to immediately roll back tariffs”, reckons Berezin.
Sure, recent climbdowns suggest the president can be turned somewhat. But by how much? And when? If most investors reasonably expect tariff rates to eventually settle at least several multiples higher under Trump than where they started 2025, they are yet to fully price that in, along with the lingering impact of economic uncertainty.
Wall Street’s earnings and growth projections have further to fall. As they do, markets may also further scrutinise the AI and US exceptionalism narratives. That’s why I fear the S&P 500 will end the year not with a 5 handle, let alone a 6 — but with a 4."
https://www.ft.com/content/4aa1d7d7-4162-4e25-a6d6-a174a9626681?accessToken=zwAAAZZ7buDWkc9KodfXQWJOJdOm1qF0qWJmgQ.MEQCIHv9BhQD9srqiMmBbiUaCMiTKVkjC4KQDjswqm7UsnWpAiAyKB-VSE0ExSRqZWJQcJdws5Cu2VfsAMCAmjifWkM81A&segmentId=e95a9ae7-622c-6235-5f87-51e412b47e97&shareType=enterprise&shareId=baae0fcf-698d-4017-80b8-42e4337c13d6
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