1. OECD projects U.S. economic growth to fall to 1.5% by 2026. 2. Rising tariffs are increasing trade costs and likely fueling inflation. 3. Global growth forecast revised down from 3.1% to 2.9% for 2025. 4. Further tariffs could lead to supply chain disruptions and economic contractions. 5. Projected U.S. inflation is expected to rise to 3.2% in 2025.
A slowdown in economic growth and increased inflation typically impact S&P 500 negatively, as seen during economic downturns like the 2008 financial crisis and more recently during global trade tensions affecting market sentiments.
The forecast revisions and potential inflationary pressures could significantly influence investor behavior in the S&P 500, leading to market corrections or bearish trends.
The effects of tariffs and inflation are likely to persist, impacting company earnings and market performance over an extended period.