Trump's Tariffs Now Seen as Biggest Market Risk in 15 Years, Says BofA Survey
Bank of America's (BAC) latest Global Fund Manager Survey showed that investors are most worried about a trade war caused by President Trump's tariffs, which they fear could lead to a global recession. Indeed, about 80% of fund managers said that this is the biggest risk to markets right now. Interestingly, this is actually the strongest level of agreement for any single risk factor since the survey began 15 years ago and shows just how seriously investors are taking the growing tension between the U.S. and its trading partners.
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The sharp rise in tariffs between the U.S. and countries like China has already hurt supply chains and shaken confidence in the economy. Even though Trump has delayed some of the tariffs, the uncertainty has been enough to slow down investment and spending. Other concerns, like the Federal Reserve raising interest rates to fight inflation, were mentioned by just 10% of those surveyed. Meanwhile, 7% said a drop in the U.S. dollar caused by foreign investors pulling back is a big worry, and only 1% pointed to a possible bubble in artificial intelligence as the top risk.
These results demonstrate how geopolitical events have become more important than traditional economic issues. The fact that AI and even inflation aren't top concerns right now shows how much investors are focused on the damage a trade war could do. Until there's more clarity on what the U.S. plans to do with tariffs, investors expect market volatility to continue and global growth to slow down.
Is SPY a Buy Right Now?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on the SPDR S&P 500 ETF Trust (SPY) based on 411 Buys, 85 Holds, and eight Sells assigned in the past three months, as indicated by the graphic below. Furthermore, the average SPY price target of $665.16 per share implies 23% upside potential.
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