Wall Street hopes April 2 will provide clarity on the US Customs Front and a reprieve from recent market volatility. However, many people are skeptical that actual clarity will always come. Investors are confused this year as they struggle with the full breadth and depth of President Donald Trump’s policies, which are changing the boundaries of global trade. The S&P 500 was the last of its all-time high of over 8% after falling into corrections field earlier this year. Nasdaq Composite has been off more than 13% from its recent peak. When Trump took him to Rose Garden Wednesday afternoon to announce plans for mutual tariffs, he announced that ample blueprints from Trump could give investors much needed certainty. But few people expect it to end. “Personally, I don’t think that just announcing the framework is enough for a relief rally, whatever it is,” said Gabriella Santos, the Americas chief strategist at JP Morgan Asset Management. “I think we need a detailed framework. I think we need some tariffs on certain countries, so that they can be digested by the economy, and ultimately by the market. There is hope for a rebound in the stock market in April. According to Ari Wald, technical strategist at Oppenheimer, the S&P 500 is going well when it started below the 200-day moving average in April. It is usually an average 2.5% advancement for that month, 73% of the time going back to 1950. It’s a worst-case scenario, but investors need to answer some important questions about trade policy. Brett Ryan, a US economist at Deutsche Bank Securities, says it’s the “biggest” approach to tariff policy from the Trump administration, meaning that the US has a sustained trade deficit. In 2024, according to the Tax Foundation, tariffs collected as a share of total imports amounted to 2.5%. For investors, it drives further economic growth and inflation outlook, increasing the risk of male dog scenarios becoming established. In that biggest scenario, Ryan expects actual GDP growth to hit 1-1.5 points. Fear of slow economic growth – partly caused by tariffs – already market observers have reduced S&P 500 year-end forecasts. David Costin, chief US equity strategist at Goldman Sachs, has reduced his second 2025 target from 6,200 to 5,700. What’s obvious at least is that Wednesday could be the start rather than the end of a long journey ahead. Christopher Harvey, head of equity strategy at Wells Fargo Securities, said he continues to build stocks. However, they worry that the risks around the so-called liberation day are not “small,” which can lead to a recession. “There is no internal beat as to how long these new tariffs will last. I simply believe that the depth and width of the tariffs and the number of actors will create a significant number of permutations and combinations,” Harvey wrote in the note. “Governments that are not generally moving entities may first decide whether they want to retaliate or not. Even if they don’t, we see a long way to the negotiation table.” “We believe the process (even under the most optimistic scenario) will require weeks/months of discussion before official changes are considered,” Harvey continued. “The bottom row believes that investors and investors’ portfolios need to be satisfied with uncertainty.” Get tickets for Pro Live Join us on the New York Stock Exchange! |Uncertain market? Earn Edge with CNBC Pro Live, the first exclusive event on the historic New York Stock Exchange. Access to expert insights is paramount in today’s dynamic financial situation. As a CNBC Pro subscriber, we recommend attending the first exclusive and in-person CNBC Pro live event held at the iconic NYSE on Thursday, June 12th. You will also get the opportunity to network with CNBC experts, talent and other pro subscribers during exciting cocktail hours on the legendary trading floor. Tickets are limited!
