S&P 500 companies' focus on Trump's tariff policy has increased the risk of market volatility.
1min read According to a Citigroup research report, companies in the S&P 500 are increasingly focused on President Trump's tariff policies, which are a key factor in potential volatility in the US stock market.Scott Chronert, a Citigroup research analyst, noted in a US stocks report on January 23: "Tariffs have a particularly prominent role in the current market landscape in the context of Trump's policy discussions." He found that the number of times companies mentioned tariffs in their quarterly earnings conference calls had surged, which was evident from the trend chart of the three-month moving average.On Friday afternoon, US stocks fell, with the S&P 500 index down 0.29% from its record high close of 6118.71 on Thursday.Chronert said: "Despite President Trump's avoidance of full-blown tariff actions at the time of his inauguration, we expect this issue to continue to be a source of market volatility in the coming months. At this point, the policy timetable for tariffs and potential tax reform seems to have been delayed."Solita Marcelli, chief investment officer of UBS Global Wealth Management Americas, mentioned in a report on Friday: "President Trump reiterated his plan to bring manufacturing back to the US through tariffs at the World Economic Forum in Davos."Marcelli further noted: "Tariffs are one of the most important issues for many investors, as it is an area where the president has the most authority to unilaterally adjust market consensus, potentially affecting the expectation of sustained economic growth and falling inflation."Investors are concerned that overly aggressive tariff policies could bring inflationary pressure and hurt economic growth. After peaking in 2022, US inflation has significantly declined, and the Federal Reserve started its rate-cutting cycle last September. The central bank will hold a two-day monetary policy meeting next week.
