1. OECD raised global growth forecast to 3.2% for 2025. 2. U.S. growth projection increased to 1.8%, despite potential declines. 3. High tariff rates affect trade and investment, raising economic uncertainty. 4. Signs of weakening labor markets could pressure consumer spending choices. 5. Future tariff increases and inflation risk are significant concerns.
The increase in tariffs and potential economic slowdown can negatively affect corporate profits, which would likely impact S&P 500 valuations negatively, echoing past examples like the trade war with China that led to market declines.
The OECD’s adjustments can influence investor confidence and market performance; given the S&P 500's composition, such macroeconomic shifts have historically proven impactful.
The immediate effects of high tariffs and uncertainty are likely to manifest quickly in market sentiment and consumer behavior, similar to the quick reaction observed during initial tariff announcements in 2018.