The S&P 500 recently entered correction territory, a move influenced by fluctuating tariff decisions earlier this month. On Tuesday, stocks rose slightly in early trading before showing signs of instability. Kate Moore, Chief Investment Officer for Citigroup’s wealth division, has advised against further investments in stocks.
The market’s movements are being affected by the uncertainty surrounding the tariff policy initiated by President Donald Trump. Earlier in the month, the S&P 500’s dip into correction territory was attributed to inconsistent tariff announcements. On Tuesday, stocks saw an initial increase due to optimism that reciprocal tariffs might be scaled back. However, this volatility prompted Kate Moore of Citigroup’s investment solutions unit, Citi Wealth, to caution against further stock investments.
Moore expressed to CNBC, “It’s uncomfortable to say this, but I would not be putting more money to work in kind of risk assets at this point, so equities or credit. I think the equity market is going to be caught in more of a trading range in the near term as both technical pressures and policy fears bounce us around.” She does not recommend selling stocks but instead suggests adopting a wait-and-see approach, which seems prevalent across the economic sector. The central bank is currently maintaining interest rates to assess the impact of tariffs and trade dynamics, as consumer sentiment declines, awaiting clear data on consumer prices and economic growth.
On Tuesday midday, market indices experienced slight fluctuations. The S&P 500 inched up 0.06%, the Nasdaq grew by 0.30%, while the Dow fell by 0.04%. George Vessey, Convera’s lead macro strategist, noted the ongoing dip in U.S. equity markets, with the S&P 500 approximately 7% below its latest peak. Vessey attributed the market downturn to heightened uncertainty over trade policies and worries about economic slowdown. He highlighted President Trump’s recent tariff comments, indicating potential reductions for certain countries, which somewhat reassured investors and supported a market rebound.
However, market volatility may persist. Goldman Sachs projected an unexpected negative impact from the anticipated tariff announcement set to be enacted on April 2. They anticipate that Trump might propose higher tariffs for negotiation purposes and that these tariffs might exceed market expectations.
Bank of America reported observing the largest net equity sales since August in their recent analysis. Their equity strategists noted that clients were net sellers for the first time in eight weeks as the S&P 500 recovered from the correction territory. A separate bank analysis indicated that the absence of tariff discussions and news suggesting they would be limited led to a significant decline in the trade policy uncertainty index.
This narrative was originally published on Fortune.com.
