US stock market underestimates risks of Trump’s tariffs — Bloomberg

As reported by Bloomberg, Wall Street analysts credit the record-breaking rally in US stocks to Donald Trump’s measured policies. Despite his tough rhetoric on tariffs, the American president has taken a restrained approach. But experts warn investors may still be overlooking the risks, even from duties already in effect.

According to Bloomberg Economics’ estimates, the tariffs paid by US importers have surged to an average of over 13%, five times higher than last year’s figure. HSBC's Alastair Pinder warned that the hike is enough to slash corporate earnings growth by 5% or more.

Even Wall Street’s most bullish analysts, including Morgan Stanley’s Mike Wilson, now believe that US corporate profits could start shrinking as early as this quarter. Such a scenario could spark a 5–10% correction.

Meanwhile, this week, investors will have fresh data to digest. As Bloomberg noted, major US corporations, those most vulnerable to shifts in trade policy and economic fluctuations, are set to release their earnings reports.