Trump's trade policies weigh on S&P 500 profits

The US stock market was put at risk by the US administration's introduction of new trade duties. The average tariff level has already reached 22.8%, and it may rise to 32.6% as negotiations with over 50 countries are completed, Bloomberg Economics notes.

Experts have identified an alarming market dependence on the technology sector using data from the past two decades. Profit margins of S&P 500 companies have predominantly been shaped by IT firms, which posted record results of 34.1% this year. Excluding the technology sector leads to a significant decline in the operating margin of the index.

Bloomberg Intelligence data shows that analysts have already revised S&P 500 earnings forecasts for 2025 from 13% to 7.9%, confirming the negative impact of trade policy on business expectations.

According to Paul Nolte of Murphy & Sylvest Wealth Management, the technology sector's vulnerability poses additional risks to the entire S&P 500 index, as IT companies' share has grown significantly in recent years.