POTUS 47

Investing under Trump 2.0

Investors should prepare for near-term market volatility and ensure portfolio diversification.

Special edition CIO livestream

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      We will be hosting a special edition of our monthly House View livestream, focused on the latest tariff announcements and the market impact. Joining the conversation will be CIO’s Jason Draho, Head of Asset Allocation Americas; Kurt Reiman, Head of Fixed Income Americas; David Lefkowitz, Head of US Equities; and Leslie Falconio, Head of Taxable Fixed Income Americas.

      Related insights

      CIO Alert | Trump tariffs: Our view for investors

      Equity futures sold off as President Trump announced a major increase in tariffs on imports into the US. While we expect US equities to end the year higher, in the near term, US consensus earnings and economic forecasts are likely to be downgraded, a tit-for-tat escalation in tariffs is possible, and equity market volatility will remain elevated. Structured solutions, quality bonds, gold, and alternatives can help diversify portfolios.

      Preview of 2 April tariffs

      The US administration is poised to announce a new round of “reciprocal” tariffs on 2 April after imposing a range of tariffs on China, Mexico, and Canada, a separate set of tariffs on steel, aluminum, and derivative products, and newly announced levies on autos and auto parts.

      How is President Trump affecting sustainability?

      While the Trump administration's policies may weigh on some areas of the sustainable investing universe, opportunities with strong commercial economics still exist.

      UBS House View Investment Strategy Guide: Tariff-ying or tariff-ic?

      The Trump administration’s tariffs have moved faster and gone further than expected. We discuss the market impact in the US, Europe, and China, and what this means for investors.

      Market volatility reignited by auto tariffs

      US equities fell on Wednesday, as trade concerns resurfaced ahead of President Trump's 25% auto tariff announcement. Investors should prepare for a wide range of selective tariffs and retaliatory measures that increase volatility but do not derail the economy. We retain a positive outlook on US equities but expect volatility to rise again in the coming weeks.

      What do Trump’s tariffs mean for markets?

      We expect the US to announce tariffs on most major trading partners on 2 April, which could lead to a cycle of tit-for-tat escalation in the coming weeks. The direct and indirect effects of tariffs will be high on investors' agenda and could contribute to further volatility. Investors should take advantage of near-term volatility and ensure portfolio diversification.

      Investment view

      We have cautioned that volatility is likely to be higher this year due to policy uncertainty and trade frictions, but we reiterate our view that the bull market is intact, and we expect US equities to end the year higher. Investors can use market swings to build long-term positions, and ensure their portfolios are well diversified.

      New in recent weeks

      US President Donald Trump ordered a 25% tariff imposed on all imported passenger vehicles and light trucks, effective 3 April. This will be expanded to include key auto parts (including engines, transmissions, electrical components and more) no later than 3 May.

      Bloomberg reported that President Donald Trump’s coming wave of tariffs is poised to be more targeted than the barrage he has occasionally threatened. According to officials cited in the report, Trump will announce widespread reciprocal tariffs on nations or blocs but is set to exclude some.

      The S&P 500 rose 2.1% on Friday on progress towards a US funding bill to avert a government shutdown through to September. US President Donald Trump over the weekend signed the bill into law. Separately, Trump said he sees a “very good chance” for a Russia-Ukraine ceasefire, with a call with Russia's Putin reportedly scheduled for Tuesday.

      Past events

      March House View Livestream

      A lot has changed since President Trump took office. His administration has initiated policy changes and markets have reacted. The Chief Investment Office (CIO) anticipates further volatility amid tariff concerns but continues to expect gains for the S&P 500 by year-end. A solid US economy and healthy corporate earnings growth should support the rally.

      Watch the replay of our discussion on tariff uncertainty, inflation, and the implications of the artificial intelligence rally, hosted by Anthony Pastore and featuring Jason Draho,Head of Asset Allocation CIO Americas and Nadia Lovell, Senior Equity Strategist CIO Americas.

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          Did you know?

          • The direct impact of auto tariffs at the US equity index level appears minimal, with the ex-Tesla auto sector accounting for just 0.25% of the market.
          • Although the Trump administration has expressed a willingness to tolerate economic “disturbances,” recent comments also suggest some flexibility in its reciprocal tariff plans. So far, the threat of tariffs has been followed by negotiations to soften them.
          • Positioning and sentiment data suggest that the long-held “US exceptionalism” view is no longer as widely held—suggesting greater scope for positive surprises.

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