Equity Market Outlook Q2 2025

2025-05-05 08:41:00 ET

Summary

• Trade and tariff uncertainty that stoked early-year volatility was supercharged at the start of Q2 by far-reaching U.S. tariff pronouncements that set off a global market meltdown and reignited recession fears in the process.
• We believe some of the corrections may be overdone, causing dislocations between fundamentals and current pricing ? and opening some interesting entry points and attractive prospects.
• U.S. equity dominance exists on a continuum in which perceptions can range from overinflated to underinflated.

Foreword

A year that opened with optimism for global equities was rattled by tariff announcements that sent markets into a tailspin.

Trade and tariff uncertainty that stoked early-year volatility was supercharged at the start of Q2 by far-reaching U.S. tariff pronouncements that set off a global market meltdown and reignited recession fears in the process.

Beyond tariffs, the second Trump presidency ushers in a broader new policy regime, with a range of yet untold macroeconomic and market implications. While tariffs are paramount today, the potential for market-supporting policies such as deregulation and corporate tax cuts leave room for emergent optimism....

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