Does the Trump bear market bring the S&P 500 Index down to 4000? Does it result in a drop of S&P earnings (2025–2026) from the pre-Trump Tariff War estimate of $260–$270 down to the $200–$220 range?
Worst case: Yes! With a serious recession and more upheaval.
Best case: Rapid trade deals are made, and the tariffs are quickly reversed. Market sentiment remains injured, but actual earnings are not as badly hit, and the stock market recovers in the medium term. Remember, the tariff levels presently anticipated are the highest in over a century.
Trump is unpredictable, and his approval rating is falling in the polls. Some Republican supporters are distancing themselves from him. Even Senator Ted Cruz is a tariff critic. Old advice from sailors: “When the rats are leaving a sinking ship, follow the rats.” Opposition to Trump’s unbridled power to impose tariffs is now growing among some GOP senators (“7 GOP senators sign on to bill to check Trump’s trade authority,” https://thehill.com/homenews/senate/5236142-congress-tariff-bill-trump/). On the House side, Don Bacon (R-Nebraska) has stepped up to propose that Congress take back the authority to decide tariffs in anything other than an emergency (“Bacon to introduce bill to give tariff authority back to Congress,” https://www.ketv.com/article/bacon-to-introduce-bill-to-give-tariff-authority-back-to-congress/64401194). Time will tell what measures might be taken.
Here’s a reading/viewing list for those who want diverse views and serious evidence.
We address idea of the taking a trillion dollars created out of thin air by the Federal Reserve by repricing the gold certificate on their books and immediately putting it in the Social Security trust fund.
Trump’s first time ever use of Section 338 tariffs has raised risk to the defense investment sector because of the possible change in the Canadian F-35 future purchase decision.
President Trump’s use of Great-Depression-era Smoot 338 tariffs, the first time ever in US history, has opened a Pandora’s Box that may alter the outcome of the midterms.
