US Stocks Likely To Open Lower After A Brief Respite: 'Add Exposure To Equities' Amid Pullback, Says Expert

The US stock market is bracing for a lower opening today, following a brief respite from the recent volatility. The market has been on a rollercoaster ride, with investors grappling with a mix of economic data, geopolitical tensions, and policy uncertainties. The latest inflation report, which showed a softer-than-expected increase, had briefly boosted hopes for a Federal Reserve rate cut. However, the euphoria was short-lived as new trade tensions and retaliatory measures from the EU and Canada added to the market's woes.

The S&P 500, which had rallied on the back of the inflation data, is now facing headwinds from the escalating trade war. President Trump's 25% tariffs on US steel and aluminum imports have prompted the EU to announce counter-tariffs on €26 billion ($28.33 billion) of US goods starting in April. Trump also doubled tariffs on Canadian steel and aluminum to 50%, though Ontario later paused its planned electricity surcharge. These trade measures have raised concerns about increased costs and potential economic slowdown, which could complicate future central bank decisions and impact market sentiment.

The market's volatility is evident in the recent performance of major indexes. The S&P 500 has decreased 243 points or 4.12% since the beginning of 2025, according to trading on a contract for difference (CFD) that tracks this benchmark index from the United States. The index is expected to trade at 5738.46 points by the end of this quarter, according to Trading Economics global macro models and analysts' expectations. Looking forward, we estimate it to trade at 5644.41 in 12 months' time.

Despite the market's volatility, some experts are advising investors to add exposure to equities during this pullback. The rationale behind this recommendation is that market pullbacks often present buying opportunities. The recent market drop could be a buying opportunity, so long as the economic fundamentals remain strong. The softer-than-expected inflation data has increased the likelihood that the Fed may cut rates later this year to support growth. This could provide a tailwind for the stock market, as lower interest rates tend to boost equity prices.

However, investors should be cautious and consider the potential risks associated with increasing equity exposure during a market downturn. The market's volatility, economic uncertainty, and potential for a recession are all factors that could negatively impact stock prices. Investors should diversify their portfolios, use dollar-cost averaging, and implement risk management strategies to mitigate these risks.

In conclusion, while the US stock market is likely to open lower today, investors should consider adding exposure to equities during this pullback. The recent market drop could present a buying opportunity, but investors should be cautious and consider the potential risks. By diversifying their portfolios, using dollar-cost averaging, and implementing risk management strategies, investors can mitigate these risks and potentially benefit from long-term market growth.