US stocks plummeted into correction territory after President Donald Trump’s presidential win, despite initial optimism about tax cuts and deregulation. Strategists who predicted a pro-growth market are now cautious, citing the impact of aggressive tariffs on trade.
The S&P 500 index fell 8% from its peak, with investors struggling to track changes in import taxes that shift daily. This uncertainty may lead consumers to cut back on spending, further exacerbating growth concerns. Economists and firms have adjusted their GDP estimates, with some cutting forecasts by as much as 1.7%.
Market gurus had been overwhelmingly bullish heading into the year, but Trump’s administration has prioritized tariffs and federal spending cuts over tax cuts and deregulations. This shift in priorities has caught investors off guard, with some firms warning of an economic downturn.
Strategists like T. Rowe Price market strategist Tim Murray and ClearBridge Investments’ Josh Jamner caution that the market’s reaction is reasonable given the uncertainty surrounding Trump’s policies. However, others, such as Neuberger Berman’s Brian Blazek, remain hopeful about growth-oriented sectors, including technology and industrials.
In response to the market volatility, some strategists recommend targeting companies with significant dividend growth, high-quality small- and mid-sized stocks, or international stocks that are undervalued. As Trump shifts his focus to deregulation, these investors may see opportunities for growth in the long term.
Source: https://www.businessinsider.com/stock-market-trump-bump-selloff-correction-outlook-prediction-investing-strategy-2025-3