Uncertainty about potential policy changes of President Trump has done little to scare the stock market rally in 2025, with the S&P 500 (^GSPC) being reached just below the record high on Wednesday.
But some on Wall Street grow concerned that many of the positive news about Trump’s approaching policy – including tax reductions, lower regulatory testing and reducing the government – can be priced. This leaves more room for disappointment than for an upward surprise ever clarity about what the next is in Washington is provided.
Close: February 21 at 4.53: 01 am
“S&P 500 price promotion signals that investors continue to view a ‘pro-business’ bias of the platform,” wrote Citi US Equity-Strateg Scott chronert in a note. “We do not disagree, but also claim that related policy disturbances with Fundamentals may not be priced.”
Chronert added that there has been no significant change in their full display, including a final objective of 6,500. For now, his team sees “more near-intermediary term risk for Trump policy effects than upward opportunities.”
At the moment, Chronert believes that investors “seem comfortable that rate purchases should lead to a muted ultimate impact.”
But the imminent question is whether the rates are actually determined.
Trump’s first TariefdeAdline of 25% tasks on Mexicos and Canada shook the market for a short period before an extension of a month cooled less than 24 hours later. Since then, many strategists have seen specific rates as a negotiating tactic rather than a real policy that investors have to praise on the market.
Read more: What are rates and how do they influence you?
With the 30-day extension Theadline to negotiate with Canada and Mexico who quickly approaches at the beginning of March and news about extra rates that flow in, investors believe that there can be a chance of a different surprise for markets.
“I think the consensus is [the Mexico and Canada tariffs were] Used for certain types of negotiations and they will probably not be implemented, “David Rogal, the main portfolio manager of the BlackRock Total Return Fund (Mahqx), told Yahoo Finance.
Rogal added that if those negotiations were to take a “turn for the worse”, there would be a “close risk” for markets.
In a memorandum for customers at the beginning of February when 25% rates on Mexico and Canada on threatening laymen, Goldman Sachs Chief US Equity -Strategist David Kostin noted that such large rates are a “downward risk” for the S&P 500 profit for his team . Combined with increased policy uncertainty, Kostin argued that the real value of the S&P 500 could see a disadvantage of approximately 5% if the market had priced “persistent implementation of the newly announced rates”.
