FINANCIAL BLOG

If “tariff” isn’t the word of the year for stock investors so far, then perhaps it’s “uncertainty.” Uncertainty around trade policy dominated the path of the stock market in the first half and will continue to play a large role in the second half. Tariffs influence the key drivers of stock market performance: economic and corporate profit growth, inflation, and interest rates.

With investor focus now squarely back on U.S. equities as new all-time highs are in sight, we dig into why strategic allocations should still consider, despite recent outperformance and multiple expansion, diversification into international equities.

There have been plenty of catalysts supporting the broader market’s recovery from the correction lows set last month. Oversold conditions fueled by indiscriminate selling left the S&P 500 with washed-out market breadth and a hard reset of its lofty valuation. First quarter earnings season came in much better than feared, and most companies unexpectedly did not pull forward guidance.

There has been no shortage of trade policy curveballs thrown at the market since the White House announced shockingly high reciprocal tariffs on April 2. Stocks fell sharply and interest rates spiked on that news, prompting President Trump to pivot to a 90-day reciprocal tariff pause.

First quarter reporting season was solid, but results didn’t offer much of a confidence boost in the outlook for the rest of the year. It wasn’t corporate America’s fault — tariff uncertainty makes it very difficult for most companies to offer an outlook that they can have confidence in. Analysts did get enough guidance to take estimates down for the rest of the year to credible levels, which is a positive step in restoring market confidence.

Investor sentiment dramatically changed after Treasury Secretary Scott Bessent and other members of the Trump administration announced a temporary pause on tariffs with China. Was that sentiment shift warranted and did anything materially change? Estimates of the effective tariff rate continue to vary and have wide confidence intervals.

A busy week of earnings, trade negotiations, and monetary policy meetings left the S&P 500 down around 0.5%. Buyer fatigue appeared to be setting in at this stage of the recovery as risk appetite from positive trade headlines faded by Friday.

The municipal bond market faced significant volatility in April, driven by spillovers from a turbulent Treasury market. Treasury yields were pressured higher by rising inflation expectations; the Federal Reserve’s cautious policy stance, reduced foreign demand; hedge fund deleveraging, portfolio shifts toward cash, and structural illiquidity.

The softer tone toward China from the White House, President Trump’s pledge not to fire Federal Reserve (Fed) Chair Jerome (Jay) Powell, and renewed optimism about Fed rate cuts all helped drive a strong market rebound last week.

LPL Research discusses another volatile week for markets, introduces a revised S&P 500 target, and assesses the likelihood of the lows recently being reached.

Last week we were able to check several of the boxes on our stock market bottoming process checklist.

Markets got quite a surprise from the Trump administration last week in the form of tariffs above even the most aggressive forecasts...

Wednesday is the big day when the Trump administration will provide more clarity on their tariff plans.

Trade uncertainty and nagging inflation made Federal Reserve (Fed) Chair Jerome Powell walk a tightrope at the latest press conference.

U.S. equity markets officially entered correction territory last week for the first time in 344 trading days.

Heightened volatility and uncertainty in both financial markets and the broader economy present challenges and opportunities for investors.

Fourth quarter earnings season is nearly complete, and it has been a good one.

The U.S. Treasury market is entering a significant transition period in 2025, facing both structural adjustments and all-too-familiar policy

Stocks continued to climb the wall of worry last week and shrugged off tariff headlines, inflation volatility, and signs of a slowdown

Use of the terms “bull” and “bear” in financial markets can be traced back to London’s financial district in the late 19th century