President Trump recently stated that now is a favorable time to invest in the stock market. However, financial experts on Wall Street caution that despite increasing investor optimism surrounding trade agreements, volatility in equities may continue.”At this point, we are still facing uncertainties. I do not believe it is a definitive moment to aggressively buy stocks,” remarked Brian Vendig, the chief investment officer at MJP, during an interview with Yahoo Finance on Friday. “In the near term, this volatility is likely to persist.”Following the announcement of a UK-US trade deal on Thursday, stock prices rose as Trump discussed future trade agreements and a pending tax bill in Congress. “You should consider investing in stocks now,” he urged. “The nation will soar like a rocket ship heading straight up.”This weekend’s focus is on Treasury Secretary Scott Bessent’s meeting with Chinese officials. There have been hints from Trump about potentially reducing the current 145% tariff rate on Chinese imports to 80%.Investors are hopeful that a US-China trade deal could pave the way for similar agreements with other nations. However, the speed at which these deals materialize remains uncertain. The 90-day tariff pause by the Trump administration is set to expire on July 9.”The primary concern is time,” Vendig emphasized. “If progress is not made swiftly and effectively in the next 60 days, the main risk to the US economy is not only related to demand fears but also inventory levels.”The impact of tariffs imposed by the Trump administration is already evident, with a significant decrease in expected cargo ship arrivals at the Los Angeles and Long Beach ports. The Port of Los Angeles anticipates a 35% drop in arrivals compared to the same period last year.Chinese exports to the US have declined in April, while trade with other countries has increased. William Dudley, former president of the New York Federal Reserve, highlighted the potential supply chain disruptions that could affect the US economy despite future trade deals being negotiated.Consumer confidence is currently at a low point, and some companies have refrained from providing outlooks due to uncertainties surrounding US tariff policies. Vanguard’s chief economist, Roger Aliaga-DÃaz, is monitoring inflation data and other indicators for signs of tariff impacts and a potential economic slowdown.”We are likely to witness the initial price shocks, leading to a slowdown in consumer spending towards the latter part of the year,” Aliaga-DÃaz explained.
Some analysts believe that President Trump’s “Liberation Day” tariffs may not be as harsh as initially feared, potentially limiting the downside for stocks. While a retest of the lows is still possible, it would depend on whether the administration signals a return to a more restrictive trade environment, according to Ross Mayfield, an investment strategist at Baird Private Wealth Management. In light of the uncertainty, investors are advised to consider defensive plays or stocks that are more resilient to economic downturns, as recommended by Keith Lerner, co-chief investment officer and chief market strategist at Truist. Lerner suggests focusing on sectors like Utilities and Communications Services, emphasizing the need to be cautious given the complexity of the current situation in Washington. For the latest stock market news and in-depth analysis, including insights on market-moving events, follow senior business reporter Ines Ferre on Twitter at @ines_ferre. Stay updated on financial and business news at Yahoo Finance.
