Us stock markets: The US stock market saw heavy fluctuations in the first six months of 2025. While the S&P 500 index fell to 19% from its highest level, it also made a new record while recovering fast. But now that the second half is starting, some big investors in the world have become careful about this rally of the market. Although the signs of Israel-Iran ceasefire and the US-China trade talks have recently given some relief, experts believe that 5 major risk in the second half can put pressure on the stock market. Let us know what are the 5 reasons that can bring down the US stock market:
1. Threat of tariff deadline
The US has to make tariffs with its major trading partner countries till the deadline of July 9. If there is no agreement on time, then more than 10% tariffs can be imposed on the products of countries with which the deal is not done. Although the UK has signed the agreement and there are signs of early agreement with the European Union, Trump’s threat to breaking the deal with Canada has once again alerted investors. UBS strategist Anthone Tsowali says, “Until the deal is final, there will be instability in the markets.”
2. Weak earning and profit pressure
In the recent months, corporate strength supported the market, but the results of the upcoming second quarter will be real tests. According to a recent survey, CEO of US companies is more negative than before and expenses. According to Federated Hermiz’s portfolio manager Lewis Dadli, “As the business environment is becoming challenging, hopes of profit may also decrease.” This can keep the market direction straight or stable.
3. Bhurajnial Risk intact
The prices of oil have fallen peacefully between Israel and Iran, but remain uncertain about Iran’s nuclear program and US-China relations. Francisco Simone, a strategist at the Santhender Asset Management, says, “Even though there is some relief, the risk will remain high.” Investors are also seeing what has been agreed with rare meaning access and chip technology in the US-China fresh trade framework.
4. US debt and Federal Reserve role
The US credit rating has recently decreased and Trump’s new tax and expenditure policy may increase the debt of trillion dollars in the coming years. Neil Robson of Columbia Threadedal Investments says, “The market is less likely to fall, but it is necessary to be cautious.” Apart from this, uncertainty is also hovering over the next chairman of the Federal Reserve. Trump has indicated that he is considering 3-4 options. Some investors are afraid that the next chairman may not be as independent as it has been so far.
5. High valuation of market
The S&P 500 index is trading at a valuation of 22 times as compared to earnings of 12 months, which is much above the average of 10 years. Many investors feel that this valuation is quite expensive, especially when America’s economic condition is weak. David Chao of Invesco Asset Management says, “If America’s economy is weak then further decline in valuations is possible.” According to him, the markets outside the US are cheap and there may be better investment opportunities there.
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