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.
DISCLAIMER: The content on this website, which may contain security-related opinions and/or information, is provided for informational purposes only and should not be relied upon in any manner as professional advice or an endorsement of any practices, products, or services. There can be no guarantees or assurances that the views expressed here will be applicable for any particular facts or circumstances and they should not be relied upon in any manner. You should consult your own advisers as to legal, business, tax, and other related matters concerning any investment. The commentary in this “post” (including any related blog, podcasts, videos, and social media) reflects the personal opinions, viewpoints, and analyses of David R. Kotok and should not be regarded as the views of Cumberland Advisors, Inc. or its employees or management, as a description of any investment advisory services provided by Cumberland Advisors, Inc., or as performance returns of any Cumberland Advisors, Inc. client. References to any securities or digital assets or performance data are for illustrative purposes only and do not constitute an investment recommendation or offer to provide investment advisory services. Any charts and/or graphs provided within are for informational purposes solely and should not be relied upon when making any investment decision. Past performance is not indicative of future results. The content speaks only as of the date indicated. Any projections, estimates, forecasts, targets, prospects, and/or opinions expressed in these materials are subject to change without notice and may differ or be contrary to opinions expressed by others. David R. Kotok is currently an employee of Cumberland Advisors, Inc. He may independently receive payments from various entities for book royalties, advertisements in affiliated podcasts, blogs, and emails. Inclusion of such advertisements does not constitute or imply endorsement, sponsorship, or recommendation thereof, or any affiliation therewith, by the Content Creator, by David R. Kotok, or by Cumberland Advisors, Inc., or any of its employees. Investments in securities involve the risk of loss. For additional disclaimers and disclosures see Cumberland Advisors’ website: https://www.cumber.com/
