Heightened uncertainty around U.S. economic policies has led to one of the worst starts on record for U.S. stocks under a new president—despite the healthy balance sheets of U.S. companies and households.
Tariffs tensions
With over 30% of S&P 500 firms’ revenue coming from overseas—especially in IT, materials, and healthcare—retaliatory tariffs and growing boycotts of U.S. products could further strain U.S. corporate earnings and amplify market volatility.
Consumer spending
Given that nearly 70% of U.S. economic activity is driven by consumer spending—largely fueled by the wealthiest 20% who hold the largest share of US stocks—a deteriorating stock market outlook could suppress consumption, slow growth, reduce tax revenues, and worsen government debt dynamics. – IIF
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