Dow, S&P 500, Nasdaq futures slide ahead of Fed meeting as Trump hints at pharma tariffs
The steep recovery in equity markets over the past two weeks is typical of bear market rallies, and the erratic swings mean almost every investor will experience pain whichever direction the market suddenly moves.
Goldman Sachs Group (GS) strategist Peter Oppenheimer said “the asymmetry for equity investing is poor. Sharp rallies within bear markets are the norm, not the exception.”
The biggest market driver is still uncertainty, with no real long-term bullish or bearish conviction seen from investors. Price action is mainly fueled by short-term headlines and guesswork on how the quickly evolving US tariffs story will be told through corporate earnings and resetting valuations.
“If the tariff announcements are reversed quickly with little lasting economic damage, this does suggest that the downside risks are limited. Nonetheless, at current valuations, we also think the upside is limited,” Oppenheimer wrote in a note.
Investing becomes far more difficult in such a regime, when both upside and downside are seen as limited and decision making is caught in foggy headline risk. Market participants have to choose between chasing a fading rally then risk exiting too late, or missing out entirely on another squeeze higher. They want to avoid trap doors in a tricky macroeconomic environment while still being able to capture opportunities.
