From Investing.com: 2025-05-09 15:31:00

US stock markets are experiencing extreme volatility, with the potential for a major trend change looming. The recent earnings season for big US stocks is crucial in determining whether the bull market will continue or if a bear market is on the horizon. The flagship stock index saw a significant bull run, but fears of tariffs caused a major downturn. Trump’s announcement of reciprocal tariffs led to a sharp decline in stock markets, teetering on the edge of a bear market.

The top 25 largest S&P 500 companies reported impressive Q1 results, with total revenues growing but at a slower pace compared to previous quarters. However, valuations for these big US stocks are at bubble levels, with price-to-earnings ratios well above historical averages. The concentration of these stocks in investors’ portfolios poses a risk, especially as consumer spending is expected to decline due to rising prices and mounting debt.

Despite strong earnings, big US stocks face challenges in the coming quarters, including potential declines in sales and profits. Factors such as tariffs, slowing consumer spending, and changes in consumer behavior could impact the profitability of these companies. With valuations already in bubble territory, investors should be prepared for a significant market correction and consider diversifying their portfolios to mitigate risks.



Read more at Investing.com: Big Tech’s Q1 Blowout Can’t Hide Bubble-Level Valuations