The US stock market demonstrates rapid growth, but experts warn of potential issues stemming from President Trump's new tariffs and rising inflation.
Trump's Tariffs and Their Impact on the Market
The recent recovery of the S&P 500 index, which has risen more than 25% since April, raises doubts among analysts about its sustainability. President Trump's new tariffs, reaching 35%, add uncertainty to the stock market. RBC Capital raised its year-end forecast for the S&P 500 to 6250, but predicted that the second half of 2025 could be a 'choppy ride.'
Rising Inflation and Its Consequences
Inflation in the US is increasing, and the new tariffs are partly to blame. The consumer price index (CPI) for June is expected to rise by 0.3% month-over-month and 2.7% year-over-year. Economists are closely monitoring how tariff increases affect consumer prices. Some companies are already absorbing additional costs, but this may change if inventories start to dwindle.
Global Markets and Tariff Threats
European and Asian markets are also feeling the impact of Trump's tariff threats. A new 30% tariff on EU goods is set to take effect on August 1, putting pressure on Europe. The situation is complicated by uncertainty in Japanese politics, where the 10-year bond yield has reached a multi-decade high ahead of elections. Global markets are now dependent on US foreign policy and the prospects for international trade.
While the US stock market continues to rise, uncertainties related to tariffs and inflation may lead to significant volatility. Investors are closely watching developments, hoping for clarity in US relations with other countries.
