ClearBridge: US Equities Face Short-Term Risks, Long-Term Opportunities

ClearBridge Investments' CIO Scott Glasser predicts a mixed short-term outlook for US equities due to tariff uncertainty and valuations, but is more bullish on the 2026 outlook when S&P 500 Index profits are expected to return to double-digit growth. Tariffs pose the biggest risk to corporate profits in H2 2025, but the firm expects them to remain high and unresolved with major trading partners for an extended period.

In a recent earnings call, ASML Holding, the world's largest supplier of chip-making equipment, warned that it may not achieve growth in 2026 due to uncertainty surrounding US tariffs. The company's CFO, Roger Dassen, stated that chipmakers in the US are delaying investments until clarity on tariff impact is reached. Shares in ASML fell 7.8% on the news, dragging peers lower [1].

Meanwhile, Autoliv Inc., a key player in the automotive safety industry, reported a record second quarter, with a 3% organic sales growth and an increased third-quarter dividend to $0.85 per share. However, the company remains cautious about tariffs and other economic challenges [2].

ClearBridge Investments' CIO Scott Glasser predicts a mixed short-term outlook for US equities due to tariff uncertainty and valuations, but is more bullish on the 2026 outlook when S&P 500 Index profits are expected to return to double-digit growth. Tariffs pose the biggest risk to corporate profits in H2 2025, but the firm expects them to remain high and unresolved with major trading partners for an extended period [3].

ASML's warnings come amid increasing uncertainty from President Trump's tariffs. The chip industry has been seeking clarity for months as the Trump administration conducts an investigation under Section 232 of the Trade Expansion Act of 1962, which could result in specific tariffs for semiconductors. ASML sells chip-making machinery to U.S. clients like Intel [1].

ASML reported sales of 7.69 billion euros for the second quarter, up from 6.24 billion euros a year earlier. The figure is above analysts' forecasts and at the top of company guidance. Net profit grew to 2.29 billion euros from 1.58 billion euros a year earlier, beating market expectations. Gross profit—a closely watched metric for companies operating in the semiconductor industry—came in at 4.13 billion euros, generating a 53.7% margin that beat both consensus and company guidance [1].

For the current quarter, the company expects sales between 7.4 billion euros and 7.9 billion euros, with a gross margin between 50% and 52% [1].

Autoliv reported a record earnings per share for the second quarter and reaffirmed commitment to "achieving USD 300 million to USD 500 million annually in stock repurchases" and announced an increase in the third quarter dividend to $0.85 per share [2].

The Veldhoven, Netherlands-headquartered company has released its next generation EUV tools known as High NA, which are key to ASML's future growth plans [1].

References:
[1] https://www.ainvest.com/news/asml-warns-uncertainty-2026-growth-tariff-uncertainty-2507/
[2] https://seekingalpha.com/news/4468922-autoliv-outlines-3-percent-organic-sales-growth-and-raises-q3-dividend-to-0_85-amid-tariff