Final week delivered one of the unstable stretches for equities this yr. The CBOE Volatility Index spiked above 50 on Thursday, erasing a lot of the prior day’s rally—when Trump introduced a 90-day delay on some new tariffs, triggering the third-largest one-day achieve in U.S. shares since WWII.
Regardless of that rebound, the key indexes stay in unfavourable territory for the reason that authentic tariff announcement. The S&P 500 is down 5.4%, the Nasdaq Composite has fallen 5%, and the Dow is off 4.8%. Apple alone shed practically $640 billion in market cap throughout simply three classes.
Citi Downgrades U.S. Equities on Valuation Dangers
Citigroup downgraded U.S. equities to impartial, warning that valuations stay elevated and earnings downgrades are nonetheless to come back. The agency pointed to tariff dangers, geopolitical considerations, and investor reallocations as causes to diversify away from U.S. markets. Citi highlighted Japan and Europe as extra engaging because of decrease valuations and extra conservative earnings expectations.
Regardless of short-term potential for tech rebounds, Citi famous cracks in U.S. fairness energy are forming, bolstered by a weaker greenback and rising Treasury yields. The Magnificent Seven may even see short-term aid, however broader U.S. fairness outlooks stay beneath strain.
