Trump Won’t Say Whether Tariffs Are Coming or Going — That Could Be An Opportunity for Long-Term Investors

On Air Force One this weekend, President Donald Trump told reporters, “The US is a lot stronger,” after signing off on the most aggressive tariffs in American history — ones his own administration estimates will cost Americans over $600B a year.

So, how is America stronger? We can leave partisans to speculate, but that feeling is not felt on Wall Street — where the S&P 500’s 10% decline in the last three trading days is drawing comparisons to 1987. And the feeling is definitely not being felt on Main Street, where Americans’ consumer sentiment has been plummeting at a fast clip. It seems the only certainty we have is that everything is going down.

Which means it’s time to perk up and pay attention.

Seeking a plan (for the market crash): Regardless of what happens next, the steep declines seen in the last three trading days put 2025 in some infamous company — alongside 1929, 1987, 2000, 2008, and 2020. And on Monday, even though the markets didn’t see another day of ~5% declines, the S&P swung 8.5% from peak to trough, the second-largest swing since the Great Financial Crisis.

Typically, these sorts of events are curtailed by government response — but in this case, the policies that created the swings are what the White House actually wants. The President even says that the tariffs could be “forever” or that he could make deals with countries, striking an indecisive tone. With those kinds of unknowns on the table, the markets might be rocky for a while — or the chaos could end tomorrow. Either way, it’s an opportunity for investors who are in it for the long term.

• Though Trump says he’s “not looking” to pause the tariffs, business leaders are becoming more vocal, betting that pressure could change his mind — and even one-time supporters of the President, like billionaire Bill Ackman, are talking.
• However, things might get worse before they get better, with the European Union expected to roll out retaliatory measures later this week — and Trump already threatening more tariffs on China for its own retaliation against the US.

Betting Big

Thankfully, elections exist — and when it comes to political ends, not even Trump is immune. With a year and a half left until the midterms, retail investors are seizing the opportunity to buy US stocks, safer bets like Treasuries, and cheaper global stocks during the current downturn.

However, after meeting Trump’s reelection with all-time highs, Wall Street is less resolute — with Goldman, UBS, and Barclays among the crop of banks downgrading the S&P 500 and global growth. And buyer beware: even those expectations may soon be about to meet their match.

• Later this week, investors will be treated to the first round of Q1 2025 earnings — and with volatility at levels not seen in decades, earnings season could be choppy.
• Analysts likely won’t be focused on last quarter’s results, but more on the commentary and guidance issued by businesses to right-size their own outlooks.

Forward-looking: In particular, investors are likely to severely punish underwhelming reports — while not rewarding those that beat expectations. Focused on the road ahead, markets will judge stocks based on their guidance for what’s to come. However, with so much uncertainty, many businesses may be inclined to issue negative guidance — or none at all. That could send stocks even lower in the weeks ahead, giving long-term buyers a chance to average down. As long as investors are willing to wait, holding through the chaos and buying incrementally could offer attractive entry opportunities. With many banks still foreseeing an S&P 500 in the high 5,000s by year-end, the index at 5,062 might be worth some ups and downs.