From Nasdaq: 2025-04-29 11:56:00

Investor optimism rose in late April 2025 as the S&P 500 rallied, seemingly absorbing President Trump’s tariffs. However, significant headwinds loom, including sticky inflation, a hawkish Fed, weak corporate earnings, geopolitical tensions, and potential impact of tariffs on U.S. consumers. Defensive strategies like gold investments and utilities are advised.

Inflation remains resilient, with the CPI rising 2.4% year-over-year in March despite the Fed’s rate hikes. The Fed’s reluctance to cut rates, contrary to Trump’s demands, could pressure equity valuations and consumer spending. Weak corporate earnings, such as losses from airlines and pharmaceutical companies, add to concerns about market health.

Geopolitical risks persist, with escalating U.S.-China trade conflict and Middle East instability rattling energy markets. Tariffs on Chinese imports affect $440 billion of goods, and ongoing trade negotiations may lead to reinstated tariffs later in the year. Potential tariff expansions and retaliatory measures could impact tech firms and equity markets.

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