According to PANews, Goldman Sachs strategists have indicated that the latest round of tariffs imposed by U.S. President Donald Trump's administration could lead to a 5% decline in the U.S. stock market in the coming months. In a report, Goldman Sachs strategist David Kostin noted that these announcements have surprised many investors, who anticipated tariffs would only be implemented if trade negotiations failed. While the economic outlook remains uncertain, Goldman Sachs economists believe that tariffs on Canada and Mexico are likely temporary.
Kostin highlighted that if the tariffs persist, they could reduce his earnings forecasts for S&P 500 companies by approximately 2% to 3%. This projection does not account for potential tightening of financial conditions or changes in consumer and business behavior. He further warned that both earnings and stock valuations could be adversely affected, potentially causing the fair value of the S&P 500 index to drop by about 5% in the short term.