As trade tensions escalate and economic storm clouds gather, investors find themselves walking a tightrope between optimism and caution. Our latest Bear and Bull survey reveals that only 50.1% of investors remain bullish, mirroring sentiments seen in the broader US economy, where initial GDP estimates unexpectedly contracted in Q1 — falling 0.3% for its first decline since 2022. This performance comes as concerns mount over trade policies and inflation, pushing businesses to rush and stock up on imports ahead of new tariffs.

• Consumer spending growth grew just 1.8% in Q1 2025, its weakest showing since mid-2023, while net exports subtracted a record-breaking 4.83 percentage points from GDP.
• Despite the S&P 500 climbing in 7 of the past 12 months, its index fell 0.76% in April, while the tech-heavy Nasdaq-100 rose 0.46% over the same period.

Forward-looking: The market’s resilience faces a critical test as the impact of tariffs begins to materialize. Fed Chair Powell has flagged a “challenging scenario,” warning that rising tariffs could drive up prices and increase unemployment — a concern echoed by Moody’s chief economist Mark Zandi, who sees potential “job losses” ahead if trade tensions continue. While the US economy faltered, the eurozone outperformed with 0.4% growth in Q1, thanks to strong showings from Spain and Lithuania. At the same time, gold’s safe-haven appeal is back in focus, with ETF inflows hitting 226 tons — a sharp reversal from last year’s 113-ton outflow. This growing disconnect, coupled with ongoing trade disputes and the Fed’s cautious stance, signals that investors could be heading into rougher market conditions in the coming months.